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EU hopes to see gas agreement between Russia and Ukraine within weeks

July 23, 2014, 18:04 UTC+3 BRUSSELS
The European Commission is planning to hold one more trilateral ministerial meeting on gas with Russia and Ukraine before August
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BRUSSELS, July 23. /ITAR-TASS/. The European Commission is hoping to see Russia and Ukraine coming to agreement on gas supplies in the next few weeks, EU Energy Commissioner Guenther Oettinger said on Wednesday.

However, he did not say when in his opinion Russia, Ukraine and the EU could resume trilateral negotiations on gas.

Oettinger said that the EU was exerting every effort to keep Ukraine storing gas in its underground storage facilities for the coming winter.

The European Commission is planning to hold one more trilateral ministerial meeting on gas with Russia and Ukraine before August, Oettinger’s spokesperson Sabina Berger said earlier this month.

She said Ukraine and Russia had assured the European Commission that they would continue to honour their obligations to supply gas to Europe. If need be, the European Commission can send observers to Ukrainian gas transportation system facilities to ensure Kiev’s compliance with its gas transit obligations.

The head of the EU delegation in Russia, Vygaudas Usackas, said earlier in July he was hopeful that “the gas talks between Russia and Ukraine will be concluded before the end of summer. The EU can help to achieve an understanding in this field and facilitate the conclusion of the gas talks between Russia and Ukraine before the end of summer”.

Trilateral gas talks between the energy ministers of Russia and Ukraine and the EU energy commissioner began on May 2 in Warsaw to agree the price of gas and the terms of paying the debt for the previous gas supplies. However the sides failed to come to agreement and ended their sixth round in Kiev on June 16 with no progress in sight.

Russian Energy Minister Novak said gas talks with Ukraine might resume only after Naftogaz of Ukraine has paid the debt for November and December 2013.

“There will be no talks before that,” Novak said and added that Gazprom had not received any payments from Naftogaz of Ukraine since June 16 when the Russian company stopped gas supply to Ukraine in the absence of prepayment for June.

Infographics Russian gas in Europe Russian gas in Europe
One-third of gas consumed in EU comes from Russia. Infographics ITAR-TASS
Naftogaz of Ukraine should pay $1.454 billion for gas supplies in November and December 2013 and show progress in paying for current supplies, Gazprom CEO Alexei Miller said.

He described Ukraine’s position at the talks as “blatant blackmail”, “absurd, ultimatum-like and unconstructive”.

Ukraine’s parliament-appointed Prime Minister Arseniy Yatsenyuk said his government was insisting on changes to the effective gas contract with Russia. The current price of Russian gas for Ukraine is $485 per 1,000 cubic metres. Ukraine is insisting on the price of $268.5.

Minister Novak suggested returning to the 2010 agreement under the current contract effective until 2019, which will set the price at $385 per 1,000 cubic metres.

Under the contract between Naftogaz of Ukraine and Gazprom, the price of gas supplied to Ukraine is determined by the formula that is pegged to the price of oil. “This formula is used everywhere in the world for pipeline gas supplies,” Novak said.

However, Ukrainian Energy and Coal Industry Minister Yuriy Prodan said an acceptable gas price for Ukraine could be within the range of $268.5 to $385.

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