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Ukraine to buy gas from French, British suppliers

Ukraine, which last month halted gas purchases from Russia, announced Thursday it would receive deliveries from two other European suppliers, paid for by a loan from the European Bank for Reconstruction and Development.

France’s Engie and Britain’s Noble Clean Fuels have won tenders to deliver gas to Ukraine in December and January, after they offered the lowest tariffs, in particular compared to Russian giant Gazprom, the Naftogaz state energy company said in a statement.

It said the deliveries will be paid for out of a $300 million (277 million euro) loan granted by the EBRD to cover the purchase of around one billion cubic metres of gas from Europe.

Naftogaz did not indicate how much gas the French and British companies would supply nor the price paid.

But a source at the EBRD said the two suppliers would deliver $49.2 million worth of gas to Ukraine.

Russia and Ukraine — locked in a bitter feud since Moscow’s annexation of Crimea in March 2014 — have been involved in a festering gas pricing dispute that has seen supplies repeatedly cut off.

Moscow turned the taps back on in October under a deal that saw Kiev switch to a pre-payment system, meaning that cash-strapped Ukraine must stump up money in advance to cover Russian gas deliveries.

But Ukraine on November 25 again announced it had stopped buying gas from Russia.

The EBRD credit is part of a financing plan worth $1.0 billion which Kiev hopes to raise from various institutions in order to pay for gas supplies.

Some 15 percent of the gas used in Europe travels through Ukraine, and the EU has been involved in mediating the dispute between Kiev and Moscow.

Ukraine and its Western allies accuse Moscow of orchestrating and supporting the pro-Russian revolt in the east to avenge last year’s ouster of Kiev’s Kremlin-backed president and the new government’s decision to align itself with the West.