* Russian reports say Gazprom to sell Ostchem 5 bcm at a
* Deal to ensure safe passage of Russian gas to Europe -
* London court has frozen part of Naftogaz coupon payment
By Vladimir Soldatkin
MOSCOW, Oct 9 Gazprom has agreed to
supply gas at a discount to a Ukrainian tycoon, whose past role
in gas deals ended after a price row in 2009, a company source
said on Wednesday, as concerns mount over Ukraine's ability to
foot its import bill.
Dmytro Firtash's Ostchem holding will purchase 5 billion
cubic metres (bcm) of gas to put into underground storage, at a
30-36 percent discount to the price Ukraine pays for Russian
gas, the source added, confirming Russian newspaper reports.
Gazprom CEO Alexei Miller has said the transit of Russian
gas exports to Europe is at risk again due to low levels of gas
in underground storage in Ukraine ahead of winter, when cold
weather pushes up demand.
"This deal with Ostchem will make it possible to increase
the level of gas storage in Ukraine and provide for safe passage
of Russian gas to Europe," the source said.
Ostchem declined to comment. Gazprom had no official
With the extra volumes purchased by Firtash, Ukraine will
hold 19 bcm of gas in storage, "the level required to ensure
trouble-free gas deliveries to Europe in the 2013-14 winter
season," Alfa Bank said in a note.
Gazprom meets a quarter of Europe's gas needs, and more than
half of Russia's gas exports to the European Union flows across
Ukraine. The remainder traverses Belarus or goes via the Nord
Stream pipeline under the Baltic Sea to Germany.
The issue of Russian gas exports to Europe has come to the
fore this week with reports that a London court froze $21.7
million out of a $75.8 million eurobond coupon payment by
Ukraine's state oil and gas company Naftogaz.
Ukraine has $10.8 billion of foreign currency debt maturing
through 2014. Its foreign currency reserves are just over $20
billion, but they are likely to keep falling, particularly if
local Ukrainians try to buy foreign currency.
A row between Moscow and Kiev in January 2009 over gas
prices and debts led to several weeks of supply cuts that hit
eastern European countries tied to Gazprom's export pipeline
network particularly hard.
After the row, both countries signed a 10-year supply deal
and eliminated Firtash's company, RosUkrEnergo, from the role of
intermediary between Gazprom and Naftogaz.
Last year, Ukraine, the second-largest buyer of Russian gas
after Germany, bought 32.9 bcm of gas from Gazprom.
Russian President Vladimir Putin said on Wednesday Ukraine
would get the volumes for underground storage at a discount,
paying $260 per 1,000 cubic metres (tcm). He did not elaborate.
Naftogaz now pays around $400 per tcm for Russian gas, more
than Gazprom's other European buyers.
Putin also said Russia will lend $750 million to Ukraine. It
was not immediately clear who will get the funds.
He commented on the Ukraine gas deal just a month before
Kiev is set to sign a free trade pact with the European Union, a
plan that has irked the Kremlin which is building its own
post-Soviet trade bloc.
Russia fears its market could be flooded as a result by
competitive EU goods entering Ukraine free of import duties and
being re-exported across the long border with Russia.
If Kiev signs the EU trade deal, joining the Russia-led
customs union would be out of the question, senior Russian
(Additional reporting by Alexei Anishchuk and Pavel Polityuk;
editing by Douglas Busvine and James Jukwey)