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EU, Ukraine set up consultative group on gas

July 25, 2014, 5:17 UTC+3 BRUSSELS
The group will include two representatives from the European Commission and two representatives of Ukraine
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BRUSSELS, July 25 /ITAR-TASS/. The European Union and Ukraine have agreed to set up a consultative group on gas, Ukrainian Energy and Coal Industry Minister Yuri Prodan said on Thursday after talks with EU Energy Commissioner Guenther Oettinger. 

“The group will include two representatives from the European Commission and two representatives of Ukraine,” Prodan said.

He also reiterated Ukraine’s readiness to receive EU monitors “at any and all gas measuring stations”.

“We want to be as transparent as possible in order to confirm that we do not siphon off gas [from transit flows],” Prodan said.

Oettinger said this week that the European Commission was hoping to see Russia and Ukraine coming to agreement on gas supplies in the next few weeks.

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

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.

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.

Naftogaz of Ukraine should pay 1.454 billion U.S. dollars 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”.

Novak suggested returning to the 2010 agreement under the current contract effective until 2019, which will set the price at 385 U.S. dollars 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 Yuri Prodan said an acceptable gas price for Ukraine could be within the range of 268.5 to 385 U.S. dollars.

Following the failure of the gas talks, Gazprom switched to prepayment mode in trade with Ukraine and filed a lawsuit in Stockholm, seeking to collect a debt of 4.5 billion U.S. dollars.

Naftogaz of Ukraine, in turn, presented its own lawsuit on the same day, seeking to revise the current gas contract with Gazprom and demanding that the Russian company return 6 billion U.S. dollars overpaid by Ukraine for gas since 2010.

Prodan said, however, that Kiev’s position on the payment of its debt to Russia had not changed: “we will pay it immediately as soon as we come to agreement on the price”.

“If no agreement is reached, the Stockholm Arbitration [Institute] will have the final say,” he added.


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