Gazprom says dispute with Kiev threatens gas exports to Europe

Disagreements with Kiev could potentially disrupt Gazprom’s gas exports to Europe through pipelines transiting Ukraine, the energy giant has said, according to RIA Novosti.

“The political and economic contradictions between Russia and Ukraine have called for concern in regard to the reliability of gas deliveries to Europe through Ukraine and Gazprom’s Ukrainian counteragent’s ability to pay its debts for delivered gas and payment for current gas deliveries,” Gazprom said in a statement made under International Financial Reporting Standards.

Gazprom fears that Ukrainian state-run gas company Naftogaz could fail to fulfill its commitments on gas transit, siphoning off gas destined for European consumers.

According to Gazprom, the escalation of the conflict over Ukraine and the international sanctions against Russia could negatively affect the financial situation of the company and limit its ability to attract loans abroad.

New hotbeds of tension or the escalation of the ongoing conflict and the introduction of international sanctions may lead to the lack of confidence of international investors in the region’s economy and investment in Russia in general.

The result could be a loss of liquidity, instability of commercial activity and a significant decrease in prices on securities of companies operating in Russia, including Gazprom, in addition to an inability for the company to attract borrowed or stock capital on the international capital markets, the company said.

“A big part of Gazprom’s revenues and obligations are in American dollars and euros. Broadening or imposing new sanctions against Gazprom may have a significant impact on the activity, the financial position and the operations results of the Holding Gazprom,” the statement said.