Remarks by Prime Minister of Ukraine Arseniy Yatsenyuk at a session of the Government on October 8, 2014

Good day, dear colleagues!

Let me start from what concerns everyone. These are energy issues, heating season, gas and how to get through the winter.

The situation is complicated, however, we oversee it. 16.7 billion cubic meters of gas has been accumulated in Ukraine’s gas storages.

Ukraine has signed a contract with one of the largest suppliers of oil and gas in the world, a Norwegian company Statoil. At 6 a.m. on October 1 the deliveries of natural gas began under the deal between Naftogaz Ukrayiny and one of the most influential energy operators Statoil from Norway.

In order to pass over the winter Ukraine needs to purchase about 5 billion cubic meters of gas additionally. We offer two solutions to this problem.

The first variant is we in synergy with the European Union pursue a common energy policy in order to sign a provisional agreement for the shipment of natural gas until the Stockholm arbitration court finally solves the dispute between Naftogaz and Gazprom.

The second option is unless such agreement is reached within the tripartite framework, in which the EU and Ukraine share a common position and the third party is the Russian Federation, Ukraine has filed the suit so that the court could issue a temporary solution to set the relevant price and terms of delivery of such natural gas until a final decision of the Stockholm court is obtained.

Naftogaz Ukrayiny is in permanent contact with our European partners. We have clearly expressed our position of how we see the conditions of signing of the provisional agreement. And we expect further negotiations and decision in this issue.

With regard to the chemical industry. We have to pass the winter, so the Government of Ukraine has adopted a decision to introduce limits and shortening in consumption of the natural gas, including by the chemical industries.

This morning I have had talks with the chief of Odesa port plant. Odesa port plant has a contract with our colleagues from Hungary. Presently, due to various reasons, Hungary has suspended shipment of natural gas to the territory of Ukraine, also to meet the needs of the plant.

Naftogaz Ukrayiny grants permission to the companies to conclude deals on purchase of natural gas and Naftogaz will ensure transportation to any entrepreneur, including chemical companies. We believe our western partners will resume gas supplies for the chemical facilities, including the port plant.

Now the delegation of Odessa port plant is staying in Hungary and in order to prevent the disruption of the production process Naftogaz will support Odesa port plant in case it receives compensation for gas volumes we have supplied to Odesa port plant and other chemical enterprises.

I emphasize for us the main task is to get through the winter time. And if we face a choice between warming the country and boosting production of the chemical plants, I can clearly declare our decision is to warm the country.

To support business entities that deal with production of mineral fertilizers and chemical plants the Government has determined to give an opportunity for everyone to purchase gas, we shall transport it to afford enterprises to operate. If you have promised to transport it, just do it.

The situation in Kyiv. Today we have had several meetings. The first is the general position of the Government: we have allocated UAH 1.8 billion to support the capital. I commission the Minister of Finance to cover UAH 835 million for debts of Kyiv for consumption of natural gas.

The Government has assumed the repayment of certain debts.

Second – UAH 1 billion is direct assistance to the Kyiv city, we should cover today all debt obligations of Kyiv. Hence we are helping the city.

Now as for the other areas and in Ukraine as a whole. As of today we begin an unprecedented repayment of debts for the consumed energy on the entire territory of Ukraine. UAH 7.3 billion will be allocated from the budget to the local budgets to repay their debts for housing and communal services.

It is vital to prepare for the heating season.

I want to remind you in case we experience decreasing temperatures throughout 3 days in a row we have a relevant decree that local authorities decide on the beginning of the heating season, and to adopt this decision they need the Ministry of Energy and Coal Industry and the Ministry of Regional Development.

We are prepared to ensure the start of the heating season, no matter how hard it is.

Meanwhile, I want to stress that the limits must be met, we need to pass the winter, and we will manage to do it, if we work smoothly and jointly. We allocate billions of money and do the utmost to have gas in our storages, but we need here the responsibility of local leaders, local officials for the use of natural gas and for control over it.

Hence, it is crucial to ensure responsibility in the entire structure on all levels. The situation is complicated so we have to take difficult decisions but it proves necessary to execute the decisions properly.

I would like to inform as well that a Ukrainian delegation led by the head of the National Bank of Ukraine and the Finance Minister of Ukraine is due to depart today to Washington to participate in the annual meetings of the International Monetary Fund, the World Bank Group and a meeting with foreign investors.

It is evident that economic performance of Ukraine is directly affected by war unleashed by the Russian Federation.

Therefore, the framework of the joint consultations includes several tasks.

The first goal is to harmonize our program with international financial institutions with the current realities.

Second is to attract utmost resources to promote Ukraine’s economic development and to survive this extremely hard period.

I want to assess a recent decision of the European Bank for Reconstruction and Development – an unprecedented decision for the EBRD when they offer the most simplified procedure of considering the projects for Ukraine and determining funding of the projects. It also includes an opportunity to finance purchase of natural gas.

And the last I would ask to adopt one more vital decision today, which is construction of the facilities along the state border. UAH 235 million is the first sum allotted for these purposes, the so-called Wall project, and we should approve a decision today on allocation of additional € 6 million, with the total amount € 66 million, to enable us to start the construction of the section of the state border between Ukraine and the Russian Federation.

Concerning the peace plan, a key element of any peace plan is to restore control over the border. When border is closed, there is no delivery of the Russian military, Russian equipment, weapons and terrorists. An open border means implementation of the peace plan is impossible. It is a key element. Russia signed under it, so it must adhere to it. We as the Ukrainian side are ready to ensure proper control over Ukraine’s state border unless the Russian army shoot Ukrainian border guards.

I thank the media and ask to proceed with the agenda.