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20th Jul 2018

Ukraine and Russia strike fragile deal on gas deliveries

  • Gas will continue to flow to Ukraine and the EU until the end of March (Photo: Bilfinger SE)

Ukraine and Russia struck a deal on Monday evening ( 2 March) securing gas deliveries to Ukraine and the EU until the end of march, provided that Ukraine pays in advance.

The talks were held in Brussels and mediated by energy union commissioner Maros Sefcovic after accusations from both sides last week threatened to disrupt gas deliveries from Russia.

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  • (Photo: Joffley)

Russian gas giant Gazprom threatened to divert supplies to rebel-held areas in Eastern Ukraine because Kiev authorities had stopped supplying the areas. Its Ukrainian counterpart Naftogaz accused Gazprom of not delivering all the gas that had been paid for.

The Ukrainian and Russian energy ministers, Volodymyr Demchyshyn and Alexander Novak, agreed after five hours of negotiation that until the end of March, "Gazprom will deliver up to 114 million cubic metres per day of pre-paid and ordered gas quantities to mutually agreed delivery points", according to the statement issued by the European Commission.

For its part, "Naftogaz will pre-pay and order from Gazprom sufficient quantities of gas to ensure covering all domestic consumption by Ukraine [and] continues to guarantee an undisrupted transit of gas to the EU".

"I am reassured that the supply of gas to the EU markets remains secure", said Maros Sefcovic after the deal. The EU imports 30 percent of the gas it needs from Russia, with 40 percent of it coming through Ukraine.

Monday's deal only secures the Winter Package agreed last October and which runs until the end of March. The European Commission asked Ukraine and Russia to start negotiations on a further package before the end of the month.

The most contentious issue will be the deliveries to rebel-held areas in Ukraine. Last night, Ukraine and Russia agreed to put aside this "highly complex [issue] in legal, technical and political terms".

Last week, Ukraine national gas company confirmed it had stopped deliveries to areas around Donetsk and Lugansk, explaining that fighting in the region had damaged pipelines.

Gazprom had started to supply these areas and was accused by Naftogaz of under-supplying the rest of Ukraine, in breach of the Winter package.

EU spokeswomen Anna-Kaisa Itkonen Monday said that EU monitors did not have access to the two delivery points situated in these areas and could not confirm Ukraine’s allegations.

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