Mogherini urges Gazprom to resume Ukraine gas flows

Ukrainian President Petro Poroshenko and High Representative of the European Union for Foreign Affairs and Security Policy Federica Mogherini speak during their meeting in Kyiv, Ukraine, 12 March 2018. [Pool/EPA/EFE]

The European Union yesterday (12 March) called on Russia’s natural gas giant Gazprom to fulfil its contractual obligations and resume shipments to Ukraine.

The latest gas dispute between the two warring neighbours began after an arbitration court ordered Gazprom to pay Ukraine $2.56 billion as part of an earlier settlement.

Gazprom vowed to challenge the decision in court and refused to resume supplies to Ukraine for the first time in more than two years on 1 March.

The decision coincided with a bitter cold spell across much of Europe. Ukraine was forced to ask schools to close and factories to cut production while it purchased additional volumes from its western neighbours.

Snow-hit Ukraine faces gas squeeze as Gazprom holds back supplies

New tensions between Moscow and Kyiv flared yesterday (1 March) after Russia’s Gazprom said it will not restart gas supplies to Ukraine and Naftogaz accused its counterpart of violating contractual agreements.

EU diplomatic chief Federica Mogherini said she discussed the standoff during a visit to Kyiv with Ukrainian President Petro Poroshenko.

“We agree that Gazprom must respect its contractual obligations,” she told reporters.

Mogherini added during a later meeting with students that EU Energy Commissioner Maroš Šefčovič was already conducting “highly intense consultations” about the conflict.

She said the EU was “ready” to help mediate but provided no details about the nature of the talks held so far.

The $2.56 billion awarded to Ukraine’s state energy company Naftogaz stems from a court case in which Gazprom and Naftogaz are each suing each other for tens of billions of dollars.

The arguments are over an expensive 10-year contract Ukraine signed in 2009 after Gazprom cut its deliveries in the middle of the winter.

The deal runs out at the end of next year and there is no guarantee that Ukraine will sign a new one because it now imports much greater volumes from central Europe.

Roughly 15% of the gas Europe buys from Russia is transported through Ukraine.

Ukraine receives a fee for the shipments and European supplies were not affected when Kyiv decided to stop purchasing Gazprom gas in November 2015.

But Russia is looking to bypass Ukraine in the future by expanding an existing Russia-Germany gas pipeline that runs through the Baltic Sea.

EU Council removes Nord Stream 2 legal hurdles

The European Commission has proposed to extend EU internal energy market rules to cover offshore gas pipelines. But the legal services of the Council – representing EU member states – has opposed the EU executive’s legislative proposal.

The so-called Nord Stream II project is strongly opposed by Poland and Ukraine as well as the three Baltic states.

Poroshenko said “Gazprom, or rather the Kremlin, has clearly demonstrated its plans to continue using the issue of gas deliveries to Europe as a geopolitical weapon.”

He added that Ukraine “has once again asked the European Commission and EU member states to scrap their plans to build Nord Stream II”.

Germany Chancellor Angela Merkel defended the project during a visit by Polish Prime Minister Mateusz Morawiecki to Berlin last month.

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