Russia, Ukraine agree ‘in principle’ new gas deal, signature expected in Minsk

(L-R) Maroš Šefcovic, Vice-President of the European Commission in charge of Interinstitutional Relations and Foresight, Russian Energy Minister Alexander Novak, and Ukrainian Minister of Energy and Environmental Protection Oleksiy Orzhel attend a press conference at the German federal economy ministry after a series of meetings on the future of gas transit through Ukraine, on December 19, 2019, in Berlin, Germany. [Europe by Satellite]

Russia, Ukraine and the European Commission, after hours-long talks on Thursday, agreed in principle on a new gas deal starting after 1 January 2020, European Commission Vice President Maroš Šefčovič told a briefing.

Ukraine is a key transit route for Russian piped gas exports to Europe. The current deal between the two post-Soviet countries expires at the end of the year.

31 December 2019: Will gas stop flowing?

The clock is ticking. The long-term gas transit contract between Russia and Ukraine is expiring on 31 December. Chances that the two sides would reach a comprehensive agreement before this date are slim. EURACTIV looks behind the scenes of the dispute.

“After these very intensive talks I am very glad to say that we reached an agreement in principle on all key elements which I believe is very positive news for Europe, for Russia and Ukraine,” Šefčovič said.

Šefčovič, Ukraine’s energy minister, Oleksiy Orzhel, and Russian Energy Minister Alexander Novak met in Berlin on Thursday. They did not provide details.

The Commission Vice President said the preliminary agreement needed first to be agreed in the capitals, Moscow and Kyiv.

Novak said the draft agreement was detailed and at a very advanced stage and expressed the hope that it would become official very soon. He thanked Šefčovič for his good offices.

Orzhel, speaking at the same briefing, said he hoped to reach “positive results for all sides” soon. Novak, praising Germany’s brokerage in the deal, said that “we all have done a good work.”

Gazprom said in a statement that Moscow and Kyiv would meet on Friday in the Belarus capital of Minsk to continue talks.

Earlier this year, German Chancellor Angela Merkel appointed Georg Graf Waldersee a special Germany envoy to represent Berlin’s interests in the gas talks.

Russia and Germany are allies in Nord Stream 2 gas pipeline, to be launched next year. It would double Russian gas supplies to Germany via the route running beneath the Baltic Sea, known as Nord Stream 1.

Meeting after Normandy talks

Russia, Ukraine and the European Commission officials were meeting 10 days after so-called Normandy talks in Paris on 9 December, attended by presidents of Russia, Ukraine, France and Germany’s Merkel.

Russia’s Vladimir Putin and Ukraine’s Volodymyr Zelenskiy, in their first face-to-face meeting, discussed prisoner exchange, a renewed commitment to implement an existing ceasefire agreement in eastern Ukraine’s Donbass region and gas.

Normandy summit upholds 'Steinmeier formula' for Eastern Ukraine

Russia’s Vladimir Putin and Ukrainian President Volodymyr Zelenskiy, in their first face-to-face meeting, took part in nine hours of talks in Paris on Monday (9 November), brokered by French President Emmanuel Macron and German Chancellor Angela Merkel.

Moscow is currently building two gas pipelines, Nord Stream 2 and Turkish Stream. The latter’s extension to south-east Europe is aimed at bypassing Ukraine.

Ukraine and Russia: On-shore versus off-shore pipelines

Ukraine’s national oil and gas company, Naftogaz, said on Monday (16 December) that no agreement had yet been reached over the transit of Russian gas through Ukraine after 2019. As tensions grow, EURACTIV looked at the details.

At his annual news conference on Thursday, Putin said Moscow planned to keep gas transit via Ukraine irrespective of new gas pipelines Russia builds, in a sign of a softer stance towards its ex-Soviet neighbour, from which Moscow annexed the Crimea peninsula in 2014.

“We will look for a solution that is acceptable for all parties, including Ukraine,” Putin said, adding that Russia would be ready to give Kyiv a discount of 20-25% for gas purchases.

“I am confident we will reach an agreement… We have no desire to exacerbate the situation… or use this to influence the situation in Ukraine itself.”

Ukraine halted its own direct imports of Russian gas in November 2015.

Pipeline gas or LNG? Ukraine doesn't keep all its eggs in one basket

Ukraine has for decades counted exclusively on Russian pipeline gas, for its own use and for the lucrative transit taxes. But the tensions with Russia after 2014 and the low prices of LNG have changed the paradigm completely.

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