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11/12/2016

Ukraine’s Naftogaz will try to deal with Gazprom without EU mediation

Energy

Ukraine’s Naftogaz will try to deal with Gazprom without EU mediation

The Naftogaz headquarters in Kyiv. [Georgi Gotev]

Ukrainian gas company Naftogaz issued a statement on Wednesday (8 June) indicating that it will consider purchasing gas from Gazprom, if the price is competitive, via direct contacts between the two companies.

Recent ‘winter packages’ guaranteeing Russian supplies to Ukraine have been secured with the help of the European Commission. In the Barroso Commission, Energy Commissioner Günther Oettinger was personally involved in the talks, while in the Juncker Commission, Vice-President for the Energy Union Maroš Šefčovič has spent a lot of his time dealing with the issue.

Ukraine, Russia and the European Union signed a deal in October 2014 that allowed Moscow to resume vital supplies of gas to its ex-Soviet neighbour over the winter, in return for payments funded in part by Kyiv’s Western creditors.

EU unblocks ‘unprecedented levels’ of cash to secure gas for Ukraine

Ukraine, Russia and the European Union signed a deal Thursday (30 October) that will see Moscow resume vital supplies of gas to its ex-Soviet neighbour over the winter in return for payments funded in part by Kyiv’s Western creditors.

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A similar deal was signed in September 2015. However, for the very first time, during the winter of 2015-2016, Ukraine did not purchase gas from Russia. Naftogaz has used reverse gas flows from its EU neighbours instead.

EU, Russia, Ukraine agree winter gas supply deal

Russia agreed to resume gas supplies to Ukraine over the winter under a deal clinched late Friday (25 September) with the European Union, capping months of difficult talks overshadowed by the Ukrainian conflict.

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The European Union is eager to mediate between Kyiv and Moscow, because in 2009, when Gazprom stopped deliveries to Kyiv, the country used gas destined for Europe for domestic consumption and left several EU countries in the cold.

In the summer period, Ukraine’s underground gas storage needs to be filled, the replenishment usually taking place until mid-October. The underground gas storage is needed not only for domestic use, but for ensuring transit.

“Naftogaz of Ukraine has proposed to Gazprom to sign an addendum to the gas supply contract between the parties, allowing Gazprom to be reinstated among Naftogaz’s potential suppliers,” says a press release from the Ukrainian company. It explains that the addendum is aimed at solving the controversial issues that exist with regard to the conditions of Russian gas supply to Ukraine for the upcoming three quarters, typical of the winter package.

Naftogaz says that purchasing gas from Gazprom is possible if the Russian company proposes a lower price than European suppliers of Naftogaz, and if other terms are agreed.

The Ukrainian company also says it will pursue its policy of diversifying its gas supplies, which is essential for the country’s energy security.

Asked for its opinion, the executive told EurActiv.com that it would be inappropriate to comment relations between two commercial companies.

Spokesperson Anna-Kaisa Itkonen reiterated that the Commission has previously indicated that it was prepared to continue talks over the winter package in the trilateral format, but if this was not needed, this was likely good news for the executive.

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