Eastern Europe News

First Fruits Of Trump-Putin Summit? Russia Offers To Extend Ukraine Gas Contracts, Ensuring Revenue To Kyiv

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Today Russia offered to extend the current gas contract with Ukraine or negotiate a new one, said Energy Minister Alexander Novak said following the trilateral gas talks between Russia, Ukraine and the European Union on Tuesday.

“We are ready to extend the current contract and to consider proposals on entering into a new contract. The position of the Russian Federation is an important relevant issue, we have to solve all controversial matters before starting a new round of relations as those are commercial contracts being implemented first of all by commercial organizations. That is why they should be mutually beneficial, with terms being beneficial both for suppliers and consumers, as well as those providing gas transit services to European consumers,” he said, reported Russian state news agency TASS.

The issue is important as Ukraine, due in part to the conflict with pro-Russian forces in the Donbass region of East Ukraine, is heavily dependent on gas transit revenue from Russia gas for its revenue. A cutoff of billions of dollars annually if the gas flow was terminated could be a fatal blow for Ukrainian President Poroshenko.

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“The clock is ticking, and if we look at the calendar we see the end of 2019 is just round the corner,” European Commission Vice-President Maros Sefcovic told a news conference after the meeting, also attended by the heads of Russian gas giant Gazprom and Ukraine’s Naftogaz.

German Economy Minister Peter Altmaier, who had invited the parties to Berlin, said he was optimistic that the two sides would eventually agree on a way of continuing gas transit, reported Reuters. Sefcovic said he wanted to see “substantial volumes which would guarantee commercially viable transit” from 2020 onwards.

It is probable that resolving the Ukrainian issue with the government in Kyiv, and the European Union, was on the table in the Trump-Putin summit that concluded yesterday.

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“We have discussed the issues of volumes to be potentially delivered on a long-term basis to European consumers, we have also discussed the rate of transit (via Ukraine), the calculations presented by the Ukrainian side. Those issues require additional discussions. We have agreed that an expert group of representatives of the European Commission, Russia’s Energy Ministry and Ukraine will be exploring those issues within a few months, and in the autumn, roughly in October, high ranking officials will meet for discussing the current status and the list of matters I just outlined,” he said.
The trilateral negotiations were calm and constructive, according to Novak. “In my view, they were quite constructive, business-like and calm. We shared information, opinions about the current situation and prospects of (gas) supplies to European consumers via the Ukrainian territory,” he said, added TASS.

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