Brussels, 30/10/2014 (Agence Europe) - As we were going to press on Thursday 30 October, the outgoing Commission, under José Manuel Barroso, remained confident that agreement could be reached before the end of its term of office on Friday 31 October, resolving the gas dispute between Russia and Ukraine and re-establishing the supply of Russian gas to Ukraine for winter 2014-2015.
“An agreement is at hand”, assured the spokesperson of the outgoing Commission, Pia Ahrenkilde, at midday on Thursday, the day after a marathon trilateral meeting between Energy Commissioner Günther Oettinger and the Russian and Ukrainian energy ministers, Alexander Novak and Yuriy Prodan, and the heads of the Russian and Ukrainian gas companies Gazprom and Naftogaz. The meeting ended at 4 o'clock in the morning without any announcement of an agreement. The Commission, however, indicated that a draft memorandum of understanding had been prepared and sent to the Russian and Ukrainian governments. Bilateral and trilateral meetings were held on Thursday afternoon and were due to continue into the evening.
On Wednesday, Barroso several times telephoned Ukrainian President Petro Poroshenko to inform him that agreement on the basis of the Commission's proposals was within reach. On Thursday morning, Barroso urged all sides “to seize the opportunity and conclude the negotiations in order to secure a continuous, secure and market-based supply of gas to Ukraine”.
If agreement was reached on the price and the whole framework, signature remained dependent on Thursday on the issue of Ukraine's financing of its debt to Gazprom and advance payment of gas supplies for winter 2014-2015. The head of Gazprom, Alexey Miller, said on Wednesday that the EU and Ukraine were about to agree on a bilateral protocol providing European financial guarantees for Ukraine. On Thursday morning, Miller stated that talks would only resume if there was an agreement between Brussels and Kiev.
“It mustn't be imagined that Ukraine is an obstacle. We are working with both parties to secure a result”, Ahrenkilde noted at midday on Thursday. Yet, Oettinger, determined still to reach a provisional agreement between Russia and Ukraine before the end of his mandate and make safe the supply of Russian gas transiting through Ukraine to the EU in winter 2014-2015, on Wednesday put the chances of success at 50%, given Ukraine's insolvency.
After the trilateral meeting on 21 October, the following points of an agreement were no longer in dispute: - payment by Ukraine of part of the money it owes Gazprom at the price of $268.5 per 1,000 cubic metres in two instalments by the end of 2014, with the first tranche of $1.45 billion due by the end of October and the second tranche of $1.65 billion before the end of December; - supply by Gazprom to Ukraine of a quantity, still to be determined (but likely to be around 4-5 billion cubic metres) of gas until March 2015, to be bought by Ukraine at the price of $385 per 1,000 cubic metres; - Ukraine would not be subject to take-or-pay obligations but would have to pay for supply in advance every month; - payment of transit costs would be guaranteed by Russia. (EH)