Ukraine's Naftogaz says Gazprom wants to end compensation contract

KIEV, June 19 Thu Jun 19, 2014 9:41am EDT

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KIEV, June 19 (Reuters) - Ukraine's state-owned gas company Naftogaz said on Thursday Russia's Gazprom wants to end a contract which compensates Ukraine if it needs to use its gas to meet additional demand from Europe.

"On Tuesday ... Gazprom Export, which deals with Russian gas exports, informed the operator of the Ukrainian gas transport system, Ukrtransgaz, about its wish to terminate a contract which provides compensation to the Ukrainian side for fluctuations in daily consumption volumes of gas to Europe," Naftogaz said in a statement.

It said the agreement would be terminated on June 23.

Gazprom did not immediately respond to a request for comment.

At the moment, Gazprom compensates Ukraine if Kiev is forced to provide the rest of Europe with increased supplies from its underground storage sites. (reporting by Pavel Polityuk, writing by Elizabeth Piper, editing by Timothy Heritage)

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