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REFILE-UPDATE 2-Shell starts gas supplies to Ukraine

Wed, 15th Apr 2015 12:54

(Removes extraneous word "quoted", paragraph 11)

KIEV, April 15 (Reuters) - Royal Dutch Shell hasbegun gas supplies to Ukraine and plans to pump at least 120 to130 million cubic metres this month, Ukrainian news agency Ligasaid on Wednesday, quoting a government source.

The agency said Ukraine was receiving the gas via Slovakiaat a cost of $253 per 1,000 cubic metres, but did not identifythe origin of the gas.

The energy ministry could not be reached for immediatecomment, but Ukrainian Prime Minister Arseny Yatseniuk told acabinet meeting that Shell was among the companies supplying gasto Ukraine.

"Shell Energy Europe is operating at a number of tradinghubs in Europe and does not disclose details of commercialagreements," a company spokeswoman said.

Ukraine started buying gas from European Union countries in2013 in a bid to reduce its dependence on Russian gas.

In 2014, Ukraine imported around 5 billion cubic metres(bcm) from EU countries which accounted for about 26 percent ofits overall gas imports.

Shell is the second global energy firm to pump gas toUkraine after Norway's Statoil signed a deal last yearto sell gas to Ukrainian state firm Naftogaz.

Ukraine, which consumed 42.5 bcm of gas last year, producesabout 20 bcm and imports the rest.

Yatseniuk told a cabinet meeting on Wednesday that Ukrainiangas consumption could slip to 40 bcm in 2015.

"The drop is partly due to the fact that Russian militaryaggression began in Ukraine and this affected industrial firms,which were gas consumers. The second factor is the drop in gasdemand from households thanks to energy efficiency," he said.

Energy Minister Volodymyr Demchyshyn was quoted by theInterfax Ukraine news agency as saying Ukraine planned toincrease imports of natural gas to 25 bcm in 2015 from 19.5 bcmlast year. He gave no additional details.

Kiev traditionally imports most of its gas from Russia, butlast June Russia cut off supplies for six months in the thirdsuch clash over pricing and unpaid bills in a decade.

This month Naftogaz and Russian gas exporter Gazprom signed an interim deal for gas for the next threemonths and Kiev said this would allow it to start storing gasfor next winter.

Kiev agreed to buy Russian gas at $248 per thousand cubicmetres. It paid $329 under the agreement that covered the pastwinter. (Reporting by Pavel Polityuk; additional reporting by NataliaZinets; editing by Jason Neely)

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