September 20, 2019 / 9:39 AM / a month ago

UPDATE 1-Ukraine seeking "full recovery" of gas transport costs from Russia

(Updates with context on gas talks, quotes, details)

BRUSSELS, Sept 20 (Reuters) - Ukraine is seeking a substantial payment from Russia for use of its pipelines to move Russian gas into Europe from 2020 but has still not received a Russian reply to its proposal, Naftogaz Chief Executive Andriy Kobolyev said on Friday.

Russia and Ukraine failed to reach a new gas transit deal on Thursday but said the talks were constructive and that they would meet again to try to find an agreement starting in January next year.

“We are looking for full recovery of all relevant costs, including recovery of residual value of Ukraine’s gas transmission system,” Kobolyev told a public event in Brussels.

“We are not disclosing a number here. But the number is quite high,” he said.

In the Brussels talks this week, Kobolyev said his team handed over documents to the Russian side including a standard transmission contract, gas quality and pressure requirements and an interconnection agreement based on European Union regulations.

However, he said Ukraine was prepared if the gas talks failed, particularly for the early months of next year.

The Russia-Ukraine gas transit agreement expires in January and Kiev is worried Moscow could stop gas supplies through Ukraine, leaving some parts of the country without gas at the height of winter.

Naftogaz has 19.6 billion cubic meters (bcm) of natural gas in underground storage and has signed at least one deal for reverse flows from Europe, Kobolyev said.

“We are fully confident that Ukraine can maintain gas supply ... at least during the first quarter of 2020,” Kobolyev said.

The underground storage level is 4 billion cubic meters more gas than at the same time last year, Kobolyev said. Naftogaz has also purchased 450 million cubic metres (mcm), with delivery assured regardless of gas transit problems, he said. (Reporting by Robin Emmott; editing by Francesco Guarascio)

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