Divisions run deep over Ukraine gas plan
Divisions run deep over Ukraine gas plan
London, 22 October (Argus) — Following the failure of EU-mediated winter gas supply talks between Russia and Ukraine, the two countries’ energy ministers have hinted at a far greater gulf between them than outgoing energy commissioner Gunther Oettinger had presented.
Ukrainian energy minister Yuriy Prodan said that the Russian side has refused to allow Gazprom to be a signatory to any legally binding interim supply deal.
“What reason is there to sign it, if it does not confirm each sides’ responsibilities?”, Prodan said.
Ukraine’s position on the interim supply contract echoes its position during negotiations over its long-term supply contract early this year. Kyiv was keen for any agreement on pricing to be set out as an amendment to the contract with Gazprom, rather than only existing as a political agreement between governments, which Kyiv reasoned could more easily be rescinded.
Prodan also said that although Ukraine was willing to pay in advance for supply this winter, it was not willing to pay off all of its outstanding debts, although it could consider paying them in part. Oettinger had said on Tuesday that Ukraine would pay off $3.1bn, which would cover all of its outstanding debts at a preliminary price of $286.50/’000m³, in two instalments — $1.45bn by the end of October, and $1.65bn by the end of the year.
Russian energy minister Alexander Novak said that an agreement could have been reached if Naftogaz had been able to show that it had the money to pay off its debts and for future deliveries. Instead, the European Commission proposed that Russia prepay for transit through Ukraine as a way to bolster Naftogaz’s funds. Novak ruled this out, saying that this would be tantamount to a loan to Naftogaz, and suggested that the EU was unwilling to help Naftogaz find other funding.
“The European Commission should have tackled this issue six months ago”, he said.
Moscow was also not keen to sell gas to an EU company at the Russia-Ukraine border for resale to Naftogaz, Novak said, adding that the commission had named GDF Suez as a candidate for the role.
Further talks are scheduled for 29 October in Brussels.
md/tdf
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