April 15, 2014 / 9:17 AM / 6 years ago

Germany's RWE begins natural gas deliveries to Ukraine

FRANKFURT (Reuters) - Germany’s RWE began deliveries of natural gas to Ukraine on Tuesday as a diplomatic crisis between Kiev and Moscow raises the risk of Russia cutting off gas supplies to Ukraine.

The gas is being delivered via Poland under a framework agreement signed by Ukraine’s Naftogaz and RWE subsidiary RWE Supply & Trading in 2012 which allows for delivery of up to 10 billion cubic meters (bcm) of gas per year.

Deliveries are based on European wholesale prices including delivery costs, it said, and involves gas from the EU, Norway and Russia.

Ukraine has won a promise of help from the European Union after Russia warned it could cut off gas supplies over Ukraine’s refusal to pay what Kiev has deemed Moscow’s “political, uneconomic price”.

Russia has nearly doubled the gas price it charges Ukraine, tearing up a discount agreed under ousted pro-Russia President Viktor Yanukovich for gas from exporter Gazprom.

RWE said it delivered about 1 bcm to Naftogaz in 2013, adding further deliveries to the Ukraine were possible “if various transport restrictions at the Slovakian/Ukrainian border are politically and technically resolved within the next weeks or months”.

Slovakia and Ukraine are to hold talks on Tuesday on conditions for reverse flows of natural gas to Ukraine of up to 9 bcm per year. {ID:nL6N0N62W2}

RWE, which will hold its annual general meeting on Wednesday, said last week it was in discussions with Naftogaz about possible gas deliveries.

Ukraine consumed around 55 bcm of gas last year.

Reporting by Christoph Steitz; editing by Jason Neely; Editing by Maria Sheahan and Jason Neely

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