On July 1, Kiev said it would stop buying Russian gas and Moscow said it halted shipments to Ukraine, after the expiry of an interim agreement on gas supplies and prices between Russian gas monopoly Gazprom and Ukraine’s national joint stock company Naftogaz.
Russia said they cut off gas supplies because Kiev has not paid its bills. “Gazprom will not supply Ukraine under any gas price if there is no prepayment,” Gazprom CEO Alexei Miller.
The standoff came after the failure of trilateral talks in Vienna between Russia, Ukraine and the EU.
Russian gas flows to the European Union via Ukraine were unaffected. The European Commission said both sides had promised gas transit west would remain smooth, but it would not give up its mediation efforts until there was agreement.
European Commission Vice President for Energy Union Maros Sefcovic said he still believed a solution was possible. “In the end, we are not that far apart. What we need is the clear political will that we want this to happen,” Sefcovic said on returning to Brussels on June 1 after the talks held in Vienna a day earlier. “We will play the role of honest broker until the end.”
The Commissioner said technical talks to seek a way forward will take place ahead of another round of political talks between Sefcovic and the energy ministers of Ukraine and Russia in September.
Naftogaz said it is ready to renew gas purchases from Gazprom after a comprehensive temporary agreement is reached between the parties. Such an agreement should cover all unresolved issues related to the disputed gas supply contract between Naftogaz and Gazprom at least untilMarch 31, 2016, it added. Just as the previously agreed Winter Package, this solution should be trilateral and binding in order to ensure its implementation by all sides, Naftogaz said.
Russia had proposed keeping prices unchanged from the second quarter at $247 per 1,000 cubic metres with a discount of around $40 per 1,000 cubic metres. Kiev wants better terms.
A particularly divisive issue is Gazprom’s take-or-pay clause that requires Ukraine to buy a certain amount of gas regardless of its needs. Other sticking points are the length of any agreement and the legal form it takes.
Russia is looking to completely bypass Ukraine by 2019 by building the Turkish Stream pipeline across the Black Sea to the Turkish-Greek border and onto Europe or expanding the existing Nord Stream pipeline.
http://www.neurope.eu/article/eu-hopes-to-resolve-new-gas-spat-between-russia-ukraine/