* Big price rise seen costing Gazprom $2 bln this year
* Analysts say supply cuts could come next winter
* Price for Ukraine is highest for any Gazprom customer
By Vladimir Soldatkin and Denis Pinchuk
MOSCOW, April 4 Russia's top natural gas
producer, Gazprom, will eventually lose more than it
gains from raising the gas price for Ukraine by 80 percent,
analysts said on Friday, predicting Kiev would cut purchases and
fail to pay in full.
Gazprom on Thursday announced a price rise for Ukraine to
$485 per 1,000 cubic metres, the second increase in three days.
The $485 price is the highest of any Gazprom customer and
compares with around $370 on average for clients in the European
Ukrainian Prime Minister Arseny Yatseniuk said the increase,
two weeks after Moscow annexed Ukraine's Crimea region, was
unacceptable and warned he expected Russia to step up pressure
by limiting supplies to Ukraine.
"Even if the price is legally justified, it would hurt
Gazprom's image, will hit capitalisation and, indirectly, the
whole Russian stock market," Valery Nesterov from Sberbank CIB
Analysts including Nesterov estimated that Gazprom could
lose around $2 billion this year from the move.
Previous pricing spats have prompted Russia to halt supplies
of gas to Ukraine, with consequent cuts in gas flows to Europe,
where Russia meets 30 percent of demand.
Analysts said Gazprom may turn the taps off again, although
immediate cuts are unlikely because of lower gas demand now that
winter has ended.
Around half the Russian gas delivered to Europe goes through
Ukraine, which ships it to Europe from storage sites in the west
of the country.
"Ukraine is unable to fill up its gas storage facilities at
this price. Without Ukrainian storage gas, Gazprom is unable to
fulfil its European export contracts," Mikhail Korchemkin at
East European Gas Analysis said.
PRESSURE ON UKRAINE
The two price rises ratchet up pressure on the former Soviet
republic following the ouster of President Viktor Yanukovich,
who had won a price cut from Russia after aborting plans to sign
political and trade pacts with the European Union in November.
Gazprom said it would raise the gas price from $268.50
starting this month after Kiev failed to pay its gas debt of
around $2.2 billion on time and after the Russian government
introduced an export fee of around $100 per 1,000 cubic metres.
"With a price like this, Ukraine is likely to continue
importing gas and increase its debt. This will go on until they
decide whether to go to an arbitration or until Russia decides
to cut gas supplies to Ukraine," said Valentin Zemlyansky, a
former spokesman for Ukrainian state energy company Naftogaz who
says he is an independent analyst.
Analysts said the jump in the gas price is detrimental to
the fragile economy in Ukraine, which would swiftly run into
"The price looks unrealistic for the long term," Nesterov
Last year, Gazprom sold 25.8 bcm of gas to Ukraine worth $12
billion, down from 33 bcm in 2012. Russia now meets around half
of Ukraine's gas needs.
Nesterov said that Ukraine is likely to buy less than the
25-27 bcm previously expected for this year. He estimated that
Gazprom would lose $2 billion this year from the price hike and
introduction of an export duty, while its production would
decline by up to 5 percent.
Alexei Kokin, of Uralsib Capital, also expected Gazprom to
lose about $2 billion this year as a result of the price hike
for Ukraine, which he predicted would cut gas purchases from
Russia to 20 bcm this year and to 15 bcm in 2015.
Analysts said the crisis could drag on until winter - the
season when Gazprom has cut gas supplies to Ukraine in past
"I think a gas conflict will happen in the winter," Kokin
(Additional reporting by Pavel Polityuk in Kiev; editing by