Russia-Ukraine: "winter plan"
30 September 2014 – 11:13am
Russia is practically ready for realization of the “winter plan” of gas supplies for Ukraine, it is waiting for a response from the Ukrainian side, Russian Energy Minister Alexander Novak said, RIA Novosti reports. Russia, Ukraine and the European Union held trilateral talks in Berlin on September 26 and reached an agreement on a plan to lift risks for transit of Russian gas to Europe this winter. According to the “winter plan”, Kyiv will pay $3.1 billion for its gas debts and for 5 billion cubic meters of gas from Gazprom for $385 per thousand cubic meters. Ukrainian Energy Minister Yuriy Prodan said right after the Berlin negotiations that the plan to cover the debt of $3.1 billion and the gas discount mechanism in exchange for lower export fees was unacceptable for Kyiv.
Alexander Kudrin, the head of the Department for Strategic Energy Research at the Russian Governmental Analytical Center, is confident that Kyiv needs an additional 5 billion cubic meters of gas, despite big gas shipments early this year. “Quite a lot of gas was delivered to Ukraine in the first half of the year, according to our customs service it is 14 billion cubic meters, which is more than in the first half of 2013. If 10 billion were delivered in the first half of 2013 and 15 in the second, there were about 15 in the first half of the year, making additional stockpiles. At least 5 billion more cubic meters will be needed in Ukraine, so we cannot speak about a sudden drop of gas imports, compared with the 25 billion it received from Russia for its own consumption and technical issues in 2013,” the expert assumes.
Concerning the price, Alexander Kudrin noted that the average price for reverse supplies was about $400 per thousand cubic meters, according to Ukrainian media. “Russian gas cost a little more, but the price was about the same. Our vision of the European price today is a different story. The European swap price is much lower. And, of course, it may provoke some questions and doubts from the Ukrainian side and may justify certain demands towards Russia. The price dropped to about $250 per 1,000 cubic meters in Europe this summer. Now it is higher, $300 per 1,000 cubic meters, there is still a difference between the prices offered by Gazprom,” explains the analyst.
The expert believes that the European side plays an important role in the negotiations, because the EU stockpiled big gas supplies this summer, so problems with transit will not be that serious for Europe. “Europeans are certainly interested in not having even slightest problems with transit. But at the same time, they are in a good situation, they have quite big supplies. Compared with previous years, their holders are 92% full (76 billion cubic meters of gas). It is more than in previous years. Usually, such volumes were accrued somewhere in late October and early November. Now, before the start of October, such volumes have already been achieved. In other words, the European Union has an additional stockpile using big stockpiles now. They were accumulated because gas in the summer was cheap,” said Alexander Kudrin.