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World|business|April 16, 2014 / 01:19 PM
German company starts gas deliveries to Ukraine

AKIPRESS.COM - gas production German utility company RWE said Tuesday it has started sending natural gas to Ukraine, a move that could support the country if Russia acts on its threat to cut off supplies because of a massive debt for past deliveries, Kansas City reported.

The reverse-flow deliveries from Germany via Poland are largely symbolic for the moment, but could be ramped up to provide about a fifth of the country's gas needs.

Last week, Russian President Vladimir Putin said Ukraine owes Russia $35.4 billion for gas. He said Russia may ask for Ukraine to start paying for gas in advance or face a shut-off.

About a third of the gas RWE AG will supply to Ukraine originally comes from Russia, said company spokesman Helmut Weintoegl. The rest comes from Norway, Britain, the Netherlands and Germany.

RWE Supply & Trading is the first Western European company to begin gas deliveries to Ukraine this year, the Essen-based company said in a statement.

RWE declined to disclose the exact price it is charging Ukraine, but said the supply wasn't subsidized in any way.

Under an agreement signed with Ukraine's state-owned Naftogaz in 2012, RWE could supply up to 10 billion cubic meters (of natural gas per year. This is about one-fifth of Ukraine's gas needs, according to U.S. Department of Energy figures for 2012.

German companies can buy gas from Russia at lower prices than what Gazprom is asking from Ukraine, so that RWE could add a transport premium and still offer Ukraine a lower price than Gazprom's.

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