Page 11 - FSUOGM Week 46 2019

FSUOGM POLICY FSUOGM
Russia proposes one-year gas transit deal to Ukraine
UKRAINE
Ukraine is unlikely to accept the terms.
RUSSIA’S Gazprom has sent a formal letter to its Ukrainian counterpart Naftogaz, proposing that the pair either extend their existing long- term gas transit contract or sign a new deal for one year.
Russia and Ukraine’s current transit agree- ment runs out at the end of this year, and several rounds of EU-brokered talks between the pair over recent months have failed to make headway in agreeing transit terms for 2020 onwards. This has sparked fears of a disruption in Russian gas supplies to Europe in mid-winter, prompting countries across the continent to store record volumes of gas.
In the letter, signed by Gazprom CEO Alexei Miller, the Russian gas exporter set out several conditions for a new agreement to be reached. First, the company called on both sides to drop all claims against each other in international arbitration courts. Gazprom owes Naftogaz $2.56bn for past violations of their transit deal under a Stockholm Chamber of Commerce rul- ing last year, but has refused to pay.
Secondly, Gazprom said Ukraine’s anti- monopoly committee must reverse its 2016 decision, imposing a $6.7bn fine on the Russia firm for abusing its dominant position on the
Ukrainian transit market. Thirdly, Gazprom insisted that Naftogaz withdraw its petition with the European Commission for an investigation to be launched into Gazprom’s activities.
Transit volumes under the new deal would depend on forecasts for demand from European buyers, Gazprom said, adding it was still awaiting Ukraine’s position on the resumption on Russian purchases next year. Naftogaz has not bought any gas directly from Gazprom since 2015, instead supplementing domestic supply with imports from its EU neighbours.
Gazprom said copies of the proposal had been forwarded to Ukrainian Energy Minister Alexey Orzhel and European Commissioner Maros Sefcovic, who is overseeing trilateral talks between Brussels, Kyiv and Moscow on 2020 transit terms.
Russia has listed the same prerequisites for a new transit deal before, and they have all been flatly rejected by Ukraine. Kyiv has also said it is against entering a one-year deal on transit, instead demanding a longer-term contract that ensures stable transit revenues even after Gaz- prom launches its Nord Stream 2 pipeline to Germany next year. ™
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