Russia: gas flow will resume after Ukraine pays
Russia: gas flow will resume after Ukraine pays
EU Commissioner for Energy Guenther Oettinger, center, Russian Energy Minister Alexander Novak , left, and Ukrainian Energy Minister Yuriy Prodan sign an agreement that guarantees Russian gas will continue to flow to Ukraine and, by extension, parts of the EU this winter as EU Commission President Jose Manuel Barroso, center back, Gazprom CEO Alexey Miller, left back and EU Commissioner for Inter-Institutional Relations and Administration Maros Sefcovic look on, at the European Commission headquarters in Brussels, Thursday, Oct. 30, 2014. (AP Photo/Geert Vanden Wijngaert)
Posted: Friday, October 31, 2014 6:52 am
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Updated: 7:15 am, Fri Oct 31, 2014.
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MOSCOW (AP) — Russia will resume shipping natural gas to Ukraine after Kyiv pays off its first debt installment for past supplies of gas next week, officials said Friday.
Alexei Miller, chief of Russia’s state-controlled Gazprom natural gas giant, made the statement hours after Russia, Ukraine and the European Union thrashed out a $4.6 billion deal that will guarantee Russian gas supplies to Ukraine and further on to the EU.
Moscow cut off gas supplies to Ukraine in June over unpaid debts, a move that followed the ouster of Ukraine’s Russia-friendly leader and the Kremlin’s annexation of Crimea in March. Talks dragged on for five months amid fighting in eastern Ukraine, where pro-Russian insurgents have been battling government troops since April. But the looming onset of winter — a fierce, freezing season in Ukraine — had given the talks increasing urgency.
Miller said Friday that Gazprom expects to get the first Ukrainian tranche of $1.45 billion before the end of next week. Under the deal, Ukraine has pledged to pay the rest of its $3.1 billion gas debt before the year’s end and also to pay in advance for Russian gas supplies through March.
Ukraine will pay $378 per 1,000 cubic meters of Russian gas until the year’s end, and the price is expected to fall slightly in the first quarter of next year.
The deal eased fears that Europe will end up shivering this winter like it did in 2009, when a spat over Ukraine’s gas bill prompted Russia to cut off energy supplies to Europe for nearly two weeks.
Russia claims Ukraine owes it $5.3 billion for past supplies, while Ukraine only acknowledges a debt of $3.1 billion based at a discount price Moscow offered to the former Ukrainian leader and annulled after his ouster.
The EU has brokered a compromise, under which supplies will resume on condition that Ukraine pays the amount of debt it accepts. The debt would be determined through arbitration.
The EU said it had been “working intensively” with international institutions to help foot the bill, since Ukraine’s economy is in dire straits.
© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Updated: 7:15 am.
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