Ultimatum on transit. Ukraine and Russia argue about gas

Ukraine and Russia fail to agree on transit of gas

In Kiev, in Moscow, talking about the unacceptable proposals for a new gas contract. Both parties talk about the possibility of termination of transit from 1 January 2020.

The Russian state company Gazprom has formulated a final proposal on the extension of the contract on gas transit through Ukraine. Moscow wants to extend the current contract or sign a new contract for one year, but only under condition of zeroing of all legal requirements.

Ministry of energy of Ukraine has called Gazprom’s offer unacceptable. And in Naftogaz declares it uneconomical. Further consultations on gas transit Kiev wants to hold with the participation of the European Commission. Корреспондент.net tells details.


What does the Gazprom

November 18 Gazprom has announced that it has sent to Naftogaz official proposal to extend the existing contract or entering into a new contract on gas transit through Ukraine for a period of one year.

To extend the existing contract Gazprom considers it necessary to:

  • the failure of both parties from mutual claims in the international arbitration and the termination of all judicial proceedings;
  • to cancel the decision of the Antimonopoly Committee of Ukraine about the penalty for Gazprom for violation of economic competition;
  • opinion the request of Naftogaz of initiation by the European Commission’s investigation against Gazprom.

In addition, Gazprom expects “the position of the Ukrainian side about its readiness” to direct purchases of gas from 2020.

Gazprom’s offer also sent to the Minister of energy of Ukraine Oleksiy Ariely and Vice-President of the European Commission to Maros Sefcovic, who takes part in trilateral gas peregovorah.

Last week, Russian President Vladimir Putin at the BRICS summit expressed readiness to conclude an agreement on the transit of gas to Ukraine at reduced prices by 20-25 percent.

“We are ready to work with Ukraine and transit of Russian gas to Europe and supplies to Ukraine itself. And at prices below those for which Ukraine receives Russian gas, but as if in reverse from Europe. I want to be clear: there is no reverse. The gas can in the halfpipe to flow in one direction, and the halfpipe to the other. It is nonsense, you know? Gibberish! It is unreal absolutely,” he said.

The Russian leader also complained about the new Naftogaz lawsuit against Gazprom in the Stockholm arbitration.

Ukrainian company, in particular, needs to revise the transit tariff from 13 March 2018 to late 2019 and to pay compensation in the amount of $ 11.8 billion, plus interest and an additional cost of 448 million for other obligations.

October 30, Putin also urged the court to nullify the claims of Gazprom and Naftogaz, associated with the settlement of debt and contracts for the transit and supply of gas to Europe through Ukraine. Detail to the material in the Russian Federation a new condition, and Ukraine is ready to stop the transit.

On 19 November, the press Secretary of the President of Russia Dmitry Peskov said that the claims of Ukraine to Russia on the gas issue in the Kremlin, is considered absurd and unacceptable.

“We believe absolutely absurd those claims that are put forward, absurd and unacceptable,” – said Peskov, noting that he had nothing to add to the words of Putin.


He wants Naftogaz

Some media wrote that the issue of gas transit to discuss within normands summit, which is scheduled for December 9 in Paris. However, the Executive Director of Naftogaz Yuriy Vitrenko denies such information.

“I don’t know, frankly, that there was some concrete work in the Normandy format talks on gas. I heard the statements of Mr. Prystayko (Minister of foreign Affairs of Ukraine – ed.), who said that although the Russian side tried to impose on gas issues in the format of Normandy, this was a success, so to speak, to fight back,” – said Vitrenko.

The company also denied the TASS that the European Commission recommended Ukraine to buy gas from Russia directly in a volume of about 15 billion cubic meters per year.

As stated in the Ukrainian company, the EC recommended that the Gazprom to conclude by European rules long-term contract for significant volumes with the new operator of the Ukrainian gas transportation system.

Naftogaz is also ready to engage in constructive negotiations, but completely “reset” the judicial claim is not exactly intended. Therefore, formally, the talks are at a standstill, which potentially lead to interruption of transit in the new year. No one can rule out such a possibility. Ukraine says gas reserves will be enough.

The new proposal of Gazprom, Ukraine energy Minister Alexei Orgel called unacceptable.

“The proposal now received, it is unacceptable for Ukraine, given the fact that you need to avoid arbitration and sign a contract only for one year”, – said the Minister.

According to him, the proposal did not suit Kyiv, as it contains the items, according to which it is proposed to abandon the arbitration and sign a contract of use of the gas transportation system of Ukraine for the period of just one year.

“If we accept some form of our demands to arbitration if we sign a long term contract, we can look for compromises. I hope that a similar compromise can go and Gazprom”, – concluded Orgel.

Vitrenko, in turn, said that Naftogaz plans to negotiate the extension of the transit contract with Gazprom in a trilateral format with the participation of the European Commission.

This will allow representatives of Ukraine, Russia and the European Commission in a transparent way to discuss the latest offer of the Russian company to provide “fair European conditions continue transit.”

A new round of talks between Russia and Ukraine about prolongation of transit is to take place this week in Brussels.

Berlin solved the problem SP-2. But the EC could challenge

November 17, entered into force the law on so-called unbundling national joint stock company Naftogaz. It provides for the allocation from its structure of the enterprise for transportation of natural gas and certification of a new independent transmission system operator.

The obligation to restructure Naftogaz, dividing the transport, storage and sale of natural gas, Ukraine has undertaken in the framework of the Third energy package of the European energy community.

Under the new law and plans of the Ukrainian government, from 1 January 2020 the transit of gas will be Operator of the gas transportation system of Ukraine, which remains a wholly state-owned. The decision to participate in the control of other persons may be approved only by the Parliament.

The state will give the new operator in the management of the transportation system for a period of 15 years. The operator will be considered independent after certification of the Ukrainian regulator, which confirms the Energy community Secretariat in Vienna.


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