Ukraine to create $1 bln gas fund

The government of Ukraine has ordered Naftogaz to borrow $1 billion to establish a fund for the purchase, storage and transport of natural gas.

The state gas company will build the fund by entering into agreements with foreign creditors that will be backed by Kiev, the government said in a statement on Monday.

The move will provide the country some protection from fluctuations in supply, with imports from Russia of particular concern.

On July 1, Ukraine suspended gas flows from Russia until a new pricing scheme is agreed on for the third quarter of 2015.

Kiev and Moscow have been at odds over the pricing, as well as Russia’s role in the conflict in Ukraine’s east.

Ukraine holds around 12 bcm (424 bcf) in gas reserves and hopes to raise this figure to 18 bcm (636 bcf) by mid-autumn.

The new supplies will come from the country’s own production and imports from Europe.