Brussels, 29/08/2014 (Agence Europe) - At a meeting in Moscow with Russia's Minister for Energy Alexander Novak on Friday 29 August, European Commissioner for Energy Günther Oettinger reiterated his proposal to find a “interim solution” to the interminable Russian-Ukrainian gas dispute - a solution that would involve setting a provisional price for Ukraine's future supplies of Russian gas, and a repayment plan for the Ukrainian debt to Russian gas company Gazprom.
Oettinger and Novak agreed that the “interim solution” should contain the following four elements: - a provisional price; - the fulfilment of all supply and transit obligations; - a repayment plan for the unpaid bills, to be developed in the next few weeks; - the use of the OPAL pipeline, which joins Greifswald in north-east Germany to Olbernhau on the German-Czech border, and which thus links the North Stream gas pipeline to the JAGAL gas pipeline - which is itself linked to the Yamal-Europe gas pipeline, and to the STEGAL gas pipeline, linked to the Russian gas transport route via the Czech Republic and Slovakia.
“We have agreed on an interim gas price for the next few months, while waiting for the Stockholm arbitration court to decide on the final price. In addition, Ukraine has to pay an account for the gas to be delivered in the months to come”, Oettinger told press at the end of his meeting with Novak. “Our main goal is to secure gas supply to the EU and its citizens, but also to the citizens in Russia, Ukraine, the Western Balkans, including accession countries and Moldova”, Oettinger added.
Novak warned of the risks to the supply of Russian gas to Europe. “The situation is highly critical as the season for heating approaches”, he said, warning of “a risk that the gas supplied by Gazprom for Europe is illegally taken by Ukraine for its own needs”. There is nonetheless a glimmer of hope, as Novak stated that partial repayment of the Ukrainian debt for deliveries of Russian gas last spring (the price of which is contested by Kiev) could possibly enable the payment of the remaining arrears to be restructured. The head of Gazprom, Alexei Miller, who was also at the meeting, believed that, should there be a partial repayment of Ukraine's debt, the deliveries of gas to Ukraine could be resumed - on condition that there was pre-payment for future deliveries.
Russia has closed off its gas tap to Russia since the failure of the trilateral negotiations on 16 June. Russia and Ukraine were not at that time able to reach an agreement on the compromise proposed by the EU - a compromise which was based on Ukraine's payment of its debt following a strict time schedule, and on a price of $385 per 1,000 m3 of Russian gas for purchases in winter and a price of just over $300 for purchases in summer (compared with a rate of $485 under a bilateral contract from 2009).
Kiev's debt was calculated by Gazprom to be $4.45 billion ($1.45 billion for the bills of November and December 2013, and $3 billion for its purchases in April and May 2014). Gazprom and Ukraine both took the case to the international court of arbitration in Stockholm in mid-June.
The halt to supplies of Russian gas to Ukraine provokes fears about disruptions to the delivery of Russian gas to the EU (half of which transits Ukraine) - as in 2006 and 2009. (EH)