Ukraine Might Buy Russian Gas below $200

Ukraine would consider buying Russian gas in the first quarter of 2016 if the price was reduced from current $227 per 1,000 cubic metres to below $200, Ukrainian energy minister Volodymyr Demchyshyn said on Monday.

Ukraine, which is in a long-running gas pricing dispute with Russia over a 2009 deal, said last month it would not need Russian gas this winter as it had enough gas in reserves.

"Russians understand that to be competitive they need to reduce the price to less than $200 (per 1,000 cubic metres) and this is not a question of discounts, it is a market situation," Interfax Ukraine news agency quoted Demchyshyn as saying.

Valery Golubev, the deputy chief executive of Russian state gas firm Gazprom, said last week the price for Ukraine in the first quarter of 2016 was seen at $230 per 1,000 cubic metres before any discount.

Under the 2009 deal, gas prices are set quarterly and depend on changes in oil and products, before discounts are applied.

Ukraine gas transport monopoly Ukrtransgaz said on Monday gas reserves had fallen by 14 percent to 14.7 bcm from the beginning of the heating season in mid-October.

But Kiev has said it has enough gas to safeguard supply in winter and ensure the stable transit of Russian gas across Ukraine to Europe. The European Union receives about 40 percent of its Russian gas imports via Ukraine.

The Ukrainian government last month urged Naftogaz to terminate gas purchases from Russia, saying that Kiev would cover its needs with supplies from Europe.

Reporting by Pavel Polityuk