Brussels, 01/07/2015 (Agence Europe) - On Tuesday 30 June, Russia, Ukraine and the EU failed to conclude an agreement in Vienna on the supply of Russian gas to Ukraine. The agreement sought is to take over from the 2014-15 winter package concluded at the end of October 2014, which was extended in March and expired on 30 June.
At the end of intense negotiations, European Commissioner for Energy Union Maros Sefcovic, Russia's Minister for Energy Alexander Novak, and his Ukrainian counterpart Volodymyr Demchyshyn threw in the towel on Tuesday. The three parties did not manage to finalise an agreement on the supply of Russian gas to Ukraine for next winter - despite the progress achieved at expert level since March.
“We would have hoped to return to Brussels with better news. But today is not the same situation as a year ago [Ed: when Russian gas company Gazprom stopped its supplies to Ukraine in June 2014 after Ukrainian gas company Naftogaz did not pay its arrears]. We have reverse flows. The delivery of gas to Ukraine and that to the EU which transits Ukraine is not in danger”, Sefcovic told press in Brussels on Wednesday 1 July.
The three parties agreed to return to the negotiating table after the summer break. A meeting at expert level is due to be held at the end of August, before a ministerial meeting in September.
“We got through the winter unhindered. We would like to draw on the positive experience of the winter package. If we want to ensure the robustness of this framework, it is crucial to focus on the issues of price, volumes and financial assistance to Ukraine [to pay the bill]”, Sefcovic added.
Sefcovic also spoke of “the clear resolve” of Russia and Ukraine “to cooperate”. At expert level, “the atmosphere was optimistic and the problems were not insurmountable” for signing a memorandum of understanding on gas, he said. There was especially disagreement on lowering the excise duties paid by the Russian government to Ukraine for the transit of gas to Europe.
On Tuesday, the parties also diverged on the duration of the memorandum of understanding - the Commission wanting it to cover the period until spring 2016. Differences of view were also significant on prices and the mechanisms for price-setting. “We will have to discuss these issues at our next expert meeting for a definitive result at political level”, Sefcovic stated.
In the meantime, Russia and Ukraine have committed to ensuring the reliable transit of Russian gas to the EU, Sefcovic reported, saying he was confident that the necessary gas storage capacities in Ukraine would be filled to ensure the continued transit of Russian gas. “These capacities stand at 12 billion cubic metres. We will need 19 billion cubic metres to ensure the transit this winter. The storage capacities will be filled either by reverse flows or by Russian deliveries, or by domestic extraction”, he said.
Poland, Hungary and Slovakia have been “very cooperative” in recent months in feeding Ukraine through reverse flows, Sefcovic also stated, saying that their total gas flow capacity to Ukraine was 1.8 billion cubic metres per month. “We need three and a half months to manage to completely fill the storage”, he said. (Emmanuel Hagry)