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Russia, Ukraine, EU Agree To Resume Winter Gas Supplies

September 26, 2015

Russia agreed to resume gas supplies to Ukraine over the winter under a deal clinched late on September 25 with the European Union, ending months of uncertainty and tough negotiations.

The European Commission's vice president for energy, Maros Sefcovic, called the deal a 'major achievement' and a 'crucial step' to ensure Ukraine has gas supplies from October through March and that Europe receives 'reliable' onward deliveries.

Ukraine and the EU can 'securely spend the winter,' said Russian Energy Minister Aleksandr Novak. 'We will spare no effort to avoid any issues, problems.'

After nearly six hours of talks with the Russian and Ukrainian energy ministers in Brussels, Sefcovic said 'all technical details are agreed' and the framework was set, but confirmation and formal signing of the full agreement would require separate procedures.

Ukrainian Energy Minister Volodymyr Demchyshyn told reporters 'commercial conditions were acceptable' and that he expected the deal to be signed shortly.

'Ukraine confirmed in this document its capacity to ensure uninterrupted transit of Russian gas to EU partners,' he said.

Novak said Moscow's offer included a cut of 'about' $20 per thousand cubic meters from the provisionally set price of $252.

He said the price is competitive with the price for gas supplied to countries neighboring Ukraine.

Sefcovic said the European Commission, the executive arm of the 28-nation EU, would arrange for EU and international financing of Ukraine's winter gas purchases, with at least $500 million available by the end of this year.

For its part, Ukraine agreed to inject 2 billion cubic meters of Russian gas into underground storage sites on its territory to help ensure adequate supplies for EU countries.

Russia and Ukraine have been locked in a gas dispute for years, but it worsened significantly when a popular uprising ousted pro-Moscow President Viktor Yanukovych in February 2014.

The gas talks were put on hold after pro-Russian rebels seized large areas of eastern Ukraine and a civil conflict broke out.

At the end of July, Ukraine announced it was halting all Russian gas purchases because the price was inconsistent with what Russian energy giant Gazprom charged other European clients.

In recent weeks, however, the EU pursued contacts with both sides, mindful of the approach of winter when gas demand will rise.

In previous disputes in 2006 and 2009, Moscow cut supplies to Ukraine during the winter, sparking knock-on shortages in Europe, especially in many of the former communist Eastern states, which still depend on Russia for nearly all their energy needs.

The EU relies on Russia for about one-third of its gas supplies, with half of that amount transiting through Ukraine.

With reporting by AFP, Reuters, and dpa

Source: http://www.rferl.org/content/russia-ukraine-eu-agree-to-resume-winter-gas-supplies/27271894.html

Copyright (c) 2015. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.

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