EU, Russia confident about Ukraine gas transit deal, despite tense talks

Pressure gauges at the Dashava gas storage near western Ukrainian town of Stryi, 14 February 2017. [EPA/PAVLO PALAMARCHUK]

Russia and the EU on Thursday (13 June) expressed hope that a solution could be found to allow gas supply transits through Ukraine to continue from next year.

Ukraine, however, accused Russia of seeking to “deceive” both Kyiv and Brussels, casting doubt on the possibility of the agreement’s extension.

With the two countries at loggerheads over Russia’s annexation of Crimea and a separatist conflict in the east of the country, Moscow and Kyiv have struggled to agree on the deal’s extension.

Most of Russia’s gas destined for Europe currently passes through Ukraine. The transit agreement between Kyiv and Moscow expires at the end of this year.

But Russian Energy Minister Alexander Novak and European Commission Vice President Maros Sefcovic of Slovakia expressed hope after talks on Thursday that a solution would be found.

“We believe that we won’t need a plan B because over the past four years we’ve always had some issues… and we’ve always found good, constructive solutions,” Sefcovic said in translated comments.

Novak for his part reiterated Moscow’s position that Russia stood ready to extend the gas agreement on prior terms. “Russia has a constructive position. It is ready to continue gas transit through Ukraine and ensure supplies for European consumers,” he told reporters.

Russia and Ukraine in EU-backed talks to avoid fresh 'gas wars'

Officials from Moscow and Kyiv were set to gather in Berlin on Tuesday (17 July) for EU-backed talks on the future of the transit of Russian gas through Ukraine in a bid to minimise disputes when the current contract expires next year.

Russia’s Gazprom and Ukraine’s Naftogaz are embroiled in a legal dispute in a Swedish court and Novak said that settling it was crucial for the extension of the transit deal.

Novak also said Russia was ready to renew gas supplies to Ukraine that were halted in 2015.

The Russian energy minister added that three-way gas talks involving Kyiv would take place no earlier than mid-September, after Ukraine holds parliamentary elections in the summer.

Yuriy Vitrenko, executive director at Naftogaz, took issue with Russia’s position, accusing Moscow of delaying the three-way talks.

“It appears that Russia is waiting for ‘negotiators’ who will betray Ukraine’s interests,” he said on Facebook. “They are trying to deceive both Ukraine and Europe,” he added, referring to Moscow.

Vitrenko said the current transit deal would not be in Kyiv’s interests, adding that the European Union should prepare to live without a new transit agreement from next year.

Speaking to EURACTIV earlier this year, Vitrenko said Russia has no interest in finding a compromise in the EU-mediated Ukraine gas transit talks and is using energy as a lever to weaken Kyiv in a bid to deepen the country’s annexation.

Russia uses gas as a lever for annexation, says Ukraine official

Russia has no interest in finding a compromise in the EU-mediated Ukraine gas transit talks and is using energy as a lever to weaken Kyiv in a bid to further the country’s annexation, a top official of Ukraine’s biggest utility, Naftogaz, told EURACTIV.com.

Russia and Ukraine have repeatedly clashed over gas deliveries in the past, with Moscow cutting supplies to Europe on several occasions in the middle of the winter, the first in 2005-2006.

Alluding to those recent year’s stoppages, Gazprom officials told EURACTIV that “we all know that those contracts are usually signed very close to the end of the year in December,” implying that the political pressure to negotiate during that time is the highest due to the cold weather conditions.

Talks are complicated by the ongoing construction of the controversial Nord Stream 2 pipeline, which has come under fire from Washington and a number of Eastern European, Nordic and Baltic Sea countries, who fear it will increase EU reliance on Moscow and isolate Ukraine.

“If Nord Stream 2 becomes operational, Ukraine will be cut out from gas transit, losing roughly the equivalent of its defence budget each year in fees,” said Agnia Grigas, an energy and political risk expert at the Atlantic Council.

“It will free up Russia’s hand in the military campaign in Ukraine without fear of damaging the export pipeline infrastructure,” she told EURACTIV earlier last month. Her view is shared throughout Europe’s security community.

The launch of the pipeline is likely to be delayed to legal constrains by Denmark over a change of the route in the Baltic Sea, a transit deal with Ukraine becomes inevitable, experts believe.

In northwest Siberia, Russia's flagship gas project defies pipeline politics

Rarely has the construction of a gas pipeline in Europe caused such a heated dispute as Nord Stream 2. EURACTIV went to the source to explore the economic, political, legal and societal dimensions of Russia’s controversial pipeline project.

[Edited by Frédéric Simon]

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