Brussels, 31/03/2015 (Agence Europe) - Before the winter package for supplies of Russian gas to Ukraine expires on Tuesday 31 March, the Russian gas company Gazprom made a proposal to the Russian government, on Monday 30 March, to extend this agreement by three months, in order to avoid an interruption to supply.
Gazprom has asked the Russian authorities to consider granting a price reduction on gas supply to Ukraine for a period of three months, its head, Alexei Miller, said on Russian television, stating that this would be the “optimal” amount of time, with summer coming soon and current price developments. Miller also stressed that granting a price cut without changing the contract signed in 2009 was a matter that fell within the power of the Russian government alone.
The Ukrainian gas company Naftogaz said earlier the same day that it had made a proposal to extend until spring 2016 the agreement, concluded with the mediation of the Commission in October 2014, which provides for around a 20% reduction in the price of Russian gas supplied to Ukraine,
Under the mediation of Maros Sefcovic, Vice-President of the Commission responsible for the Energy Union, Russian Energy Minister Alexander Novak and his Ukrainian counterpart Volodymyr Demchyshyn agreed on 20 March on the agenda for talks on a new arrangement for supplies of Russian gas to Ukraine. A further meeting is to take place between now and the end of April.
The three parties agreed on three points: - Russia must look into the possibility of giving Ukraine a discount on gas supplies; - Ukraine must make sure that it builds up sufficient reserves to ensure the transit of Russian gas for Europe through its territory; - the Commission must look at how it can help Ukraine to find the financial support it needs to buy gas. A joint expert group will present a proposal at the forthcoming trilateral ministerial meeting.
By June at the latest, the Commission hopes to reach an agreement to ensure that Ukraine can build up its gas reserves by the winter, as these are expected to fall to 6.5 billion m3 in April. The level required to ensure the uninterrupted transit of Russian gas destined for the EU is 20 billion m3. This is of vital importance, given that almost half of Russian gas consumed in Europe transits via Ukraine. Until then, following the expiry of the winter package, Ukraine's gas supply can be secured through reverse gas flows in the pipelines linking the country to Slovakia, Poland and Hungary.
The EU is also hoping to get an extended agreement from Russia and Ukraine to run until the end of 2016, when the International Court of Arbitration in Stockholm will give its verdict on the dispute brought by both parties to resolve the matter of Naftogaz's payment arrears to Gazprom. (Emmanuel Hagry)