Naftogaz announced on Nov. 26 that it broke its contract to supply 6 billion cubic meters of gas, approximately 15% of Ukraine’s annual consumption, to oligarch Dmytro Firtash’s Ye Energy.
The state-owned oil and gas giant’s communications director, Maksym Bilyavskyi, estimated that Naftogaz could have lost $4 billion if the contract had been allowed to continue through the 2021-22 heating season. It is not clear how much money had already been lost on the deal.
According to Bilyavskyi, Naftogaz was supposed to sell gas to Ye Energy for $0.27 per cubic meter, which is too low. In July, Ukrainska Pravda reported that Ye Energy was planning to sell the gas to industrial consumers for a lot more. In November, gas traded at an average $1.33 per cubic meter.
Firtash has lived under house arrest in Vienna since 2014 after being indicted for bribery by the U.S. government.