Ukraine’s DTEK Says Crimea Power Supply at Risk From Debts

Apr 25, 2014 12:50 pm ET

(Updates with gas payment demands in 5th paragraph.)

April 25 (Bloomberg) -- DTEK, the Ukrainian energy company led by the nation’s richest man, said customers in Crimea run the risk of power cuts after they didn’t fully pay for electricity they consumed in March.

Companies and organizations owe Krymenergo, DTEK’s Crimean unit, 741 million Hryvnia ($64.4 million), the company with offices in Kiev and Donetsk said in a statement on its website today. DTEK is controlled by Rinat Akhmetov, who has a personal fortune of about $11.9 billion, according to data compiled by Bloomberg.

“The main condition of supplying power to the peninsula is 100 percent payment in Ukraine’s currency,” according to the statement. The unit isn’t authorized to supply customers if it hasn’t received payment, Dmitriy Gontar, director for sales at DTEK Krymenergo, said in the statement.

The escalating crisis in eastern Ukraine and Russia’s annexation of Crimea last month led to the worst standoff against the U.S. and Europe since the collapse of the Soviet Union. Five Western leaders agreed to extend sanctions on Russia today, according to an e-mail from the office of U.K. Prime Minister David Cameron.

OAO Gazprom, the state-run Russian gas company, this week presented Ukraine with an additional $11.4 billion bill for gas it promised to buy last year. According to the terms of a 2009 contract, Ukraine owes a total of $18.4 billion under take-or- pay clauses, where customers must pay for gas whether they use it or not, Russian President Vladimir Putin said earlier this month.

Putin also said outstanding debts mean Ukraine will have to pay for gas up front or risk being cut off, an event that could disrupt supplies to Europe. European customers of Gazprom get about 15 percent of their shipments through Ukraine’s pipelines. Russia also supplies Europe using links running under the Baltic Sea and through Belarus.