EU-Russia-Ukraine Gas Talks: Moscow Ready to Make Concessions

Written by | Thursday, July 2nd, 2015

Russia, Ukraine and the European Union on Tuesday (30 June) wrapped up trilateral talks in Vienna after a series of meetings between the European Commission Vice-President for Energy Union, Maros Sefcovic, Naftofaz CEO, Andriy Kobolev, Russian Energy Minister, Aleksander Novak, and Ukrainian Energy Minister, Vladimir Demchyshyn had been held.

The objective of the negotiations was to try to come up with an agreement complementing the current Winter Package, which ended in March and was partially extended to June. The European Union, which acts as a mediator, has been working with Moscow and Kiev on a draft protocol after a number of meetings at expert level seeking to find a compromise between both sides. Mr. Sefcovic commented that yesterday’s talks had again demonstrated that all parties “agree on the principles needed to ensure stable and smooth gas deliveries to Ukraine and transit to the EU.” He further emphasized that “the translation of these principles into a jointly agreed final framework require further work but as the meeting has shown today, the parties are still far apart.”

In the meantime, Russian Prime Minister, Dmitry Medvedev, told the Russian Energy Minister and Gazprom CEO that Russia was ready for concessions in the talks saying that concessions “within reason” should be made “despite all the difficulties in the current relations with Ukraine.” Mr. Medvedev’s comment came after Gazprom had said that it would charge Ukraine $287 per 1,000 cubic meters with no discount in the third quarter. However, Russian Prime Minister also hinted that Ukraine would be given a discount of $40 per 1,000 cubic meters. He moreover reminded that Russian supplies to Europe rely on Ukraine as a transit country. Around one sixth of Europe’s gas consumption comes via Ukraine. Mr. Medvedev concluded that Russia “cherishes (its) reputation as a reliable gas supplier… This (gas discount) is a serious measure to support the Ukrainian economy”.

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