Brussels, 19/03/2015 (Agence Europe) - The trilateral Russia-Ukraine-EU ministerial meeting, in Brussels on 20 March, aims to lay the foundations for a new arrangement for the post-winter package of 2014-2015 for the supply of Russian gas to Ukraine. This would ensure the continuity of gas supply and would secure the transit of Russian gas destined for the EU next winter through the replenishment of Ukrainian reserves, a European source close to the issue stated on Thursday 19 March.
This “launch meeting” - to be attended by Russia's energy minister Alexander Novak and his Ukrainian counterpart Volodymyr Demchyshyn, alongside European Commission Vice-President for Energy Union Maros Sefcovic - aims to establish the agenda for discussions on the post-winter package arrangement (the package expires on 31 March) and to agree on the points to be settled (especially the price and volumes to be delivered). “We are not expecting spectacular results”, the source stated.
The European party wants to reach an arrangement in June at the latest for Ukraine to be able to replenish its gas reserves by next winter (as they have now fallen to 6.5 billion cubic metres, and the required level is 20 billion cubic metres to be able to assure the continued transit of Russian gas to the EU). This replenishment is imperative, given that half the Russian gas consumed in Europe transits Ukraine.
Until then, Ukraine's gas supply is being assured by reverse flows in gas pipelines linking Slovakia, Poland and Hungary. However, these reverse flows will not be enough to replenish the required level of stocks. Currently, the reverse flows just between Slovakia and Ukraine, which can reach 40 million cubic metres per day, are stable, said the source.
The EU also wants to obtain an agreement between Russia and Ukraine lasting until 2016 - the date when the international arbitration court in Stockholm will give its judgment. (Both parties appealed to the Stockholm court to settle their old dispute on the arrears of Ukrainian gas company Naftogaz to Russian gas company Gazprom.) After the fall of former Ukrainian president Viktor Yanukovych, Russia decided to increase the price of gas sold to Ukraine, then in June 2014 it broke off its supplies as Kiev was not able to pay its debt of several months. The winter package concluded under the mediation of the European Commission last October enabled Ukraine's supply of Russian gas to be resumed.
After a hitch in mid-February concerning implementation of the winter package, Russia and Ukraine agreed on 2 March, with EU mediation, to guarantee its continuity until its expiry, thus securing the supplies of Russian gas destined for the EU, transiting Ukraine.
This hitch resulted from Russia deciding to deliver gas directly to the conflict areas controlled by the pro-Russian separatists in the regions of Donetsk and Luhansk in Eastern Ukraine, using funds given to Russia by Ukraine for the advance payment of Ukraine's gas orders.
During the meeting on 2 March, the two parties agreed to deal with this part of the issue. The EU expects it to be dealt with as part of the Minsk agreements of 12 February for a comprehensive and peaceful settlement of the Ukrainian crisis. “The Commission supports the principle that this issue must be separate from the discussion of the summer package. However, we can't rule out that this issue will not be raised by the Ukrainian party or the Russian party on Friday”, stated the source. (Emmanuel Hagry)