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Next trilateral talks on Ukraine’s gas issue likely to be held May 26

May 16, 2014, 16:19 UTC+3 BRUSSELS
The previous meeting in Warsaw on May 2 focused on the issues of the Russian natural gas transit via Ukraine as well as on Ukraine’s gas debt to Russia
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BRUSSELS, May 16. /ITAR-TASS/. Another round of trilateral talks involving Russian and Ukrainian energy ministers as well as the European commissioner for energy to resolve the natural gas issue in Ukraine is likely to take place on May 26, Pia Ahrenkilde Hansen, a spokesperson for the European Commission, said on Friday.

She praised the previous trilateral meeting on the issue earlier in the month saying that a certain progress had been reached. Russia and Ukraine should be taking into account the results of that meeting, when they would be debating on the natural gas price.

The meeting in Warsaw on May 2 focused on the issues of the Russian natural gas transit via Ukraine as well as on Ukraine’s gas debt to Russia.

Ukrainian gas debt

Ukrainian state energy company Naftogaz’s debt to Moscow currently stands at about $3.5 billion with the gas price standing at $485.5 per 1,000 cu m. European consumers are afraid the situation may affect transit gas supplies to Europe.

On April 10, Russian President Vladimir Putin sent a letter on the situation in Ukraine to the leaders of 18 European countries who buy Russian natural gas. In the letter, he explained in detail the current critical situation with Ukraine’s debt for Russian gas supplies, which could affect gas transit to European consumers.

Moscow recently substantially raised the price for gas supplied to Ukraine from the figure of $268.5 per 1,000 cubic meters agreed last year when an association agreement with the EU was shelved in November 2013.

In the second quarter of 2014, the price for Russian gas for Ukraine was set at $385.5 per 1,000 cu m. Russian energy giant Gazprom said earlier that the price rose from $268.5 due to the return to earlier contract agreements, as Ukraine failed to fulfill its commitments under an additional agreement concluded in December 2013, which obliged the country to pay for supplied volumes of Russian gas in time.

On April 2, Putin signed a law on denunciation of the Kharkiv Accords with Ukraine, which were struck in 2010 and stipulated that Russia’s lease of naval facilities in Crimea [then part of Ukraine] would be extended by 25 years beyond 2017 - until 2042.

The Kharkiv deals envisioned a discount of $100 per 1,000 cu m on Russian gas for Kiev. Now that the accords have been denounced due to Crimea’s accession to the Russian Federation, the discount will no longer be applied, raising the gas price by another $100 to $485.5 per 1,000 cu m, which is expected to make the economic situation in Ukraine even more complicated.

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