Kyiv ready to buy Russian gas in Q1 if prices are reduced to under $200 per 1,000 cubic meters - Energy Ministry

Ukraine is ready to purchase gas from Russia in Q1, 2016, only if prices are reduced to under $200 per 1,000 cubic meters, Energy and Coal Industry Minister of Ukraine Volodymyr Demchyshyn has said.

"Russians don't understand that in order to be competitive they need to lower the price to less than $200, and this does not even include discounts, this is just the market environment," he told reporters in Kyiv on Monday.

Russian Energy Minister Alexander Novak said earlier that the Russian side will decide the price of gas for Ukraine in Q1, 2016 this week.

"We don't have full reports in regards to first quarter prices. I think that next week we will clarify it, then it will be the amount, the price, compared with neighboring countries," he said.

Russia is setting the price for Naftogaz Ukrainy by providing discounts through special duties, focusing on spot prices for gas in Europe. Recently, Gazprom deputy chairman Valery Golubev said that the estimated contract price for gas for Ukraine in the first quarter (without discounts) was $230 per 1,000 cubic meters. At this point, forward contracts for the first quarter are traded at $176 per 1,000 cubic meters on European hubs.

Earlier, Gazprom requested a letter of guarantee from Naftogaz Ukrainy with gas extraction volume obligations for the first quarter.