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26Aug14


Russia, Ukraine, EU agree to go ahead with trilateral consultations on gas


Russia's Energy Minister Alexander Novak and EU Energy Commissioner Gunther Oettinger will hold a bilateral meeting on Tuesday night to discuss issues of Russian natural gas supplies to Ukraine and Europe.

"We will discuss the current situation concerning with gas deliveries and transit," Novak, who is currently visiting the Belarusian capital of Minsk, told journalists. "More detailed talks will be held in Moscow on August 29.

Earlier on Tuesday, Alexander Novak said Russia was ready to sell to Ukraine additional gas volumes should Kiev pay for them.

"We are always ready to sell [more gas] if we receive the money [for it]," Novak told ITAR-TASS.

Ukrainian Prime Minister Arseniy Yatsenyuk said Monday his country needs to additionally buy 5 billion cubic meters of Russian gas for the upcoming winter. Yatsenyuk said the volume of reverse gas supplies from Europe Kiev hoped for will only total 1 billion cubic meters.

Russian state-controlled energy giant Gazprom is implementing the South Stream project to diversify deliveries of natural gas to Europe bypassing Ukraine and reduce dependence on transit countries.

The South Stream Transport B.V. company is an international joint venture organized to carry out planning, construction and subsequent operation of the gas pipeline that will be laid through the Black Sea to Bulgaria and on to Italy and Austria.

Novak cited expert data saying Ukraine will hardly live through the winter without Russian gas.

Gazprom on June 16 switched Ukrainian national oil and gas company Naftogaz to prepayment for gas supplies because Kiev failed to pay part of its gas debt by the deadline of 10:00 Moscow Time on June 16. Gas supplies to Ukraine were halted, but transit volumes were reportedly passing via Ukraine to Europe in line with the schedule.

Gazprom said June 16 that Naftogaz's past due debt for supplied Russian gas totaled $4.458 billion.

Russia recently raised the gas price for Ukraine to $485.5 per 1,000 cubic meters, but Ukraine has insisted the price should be lowered to that of this year's first quarter ($268.5 per 1,000 cu m).

The price for Kiev rose to $385.5 per 1,000 cu m in the second quarter of 2014 because Ukraine failed to fulfill its commitments under an additional agreement concluded in December 2013, which obliged the country to pay for supplied volumes of Russian gas in time.

Another raise to $485.5 per 1,000 cu m was due to the cancelation of the Kharkov Accords with Ukraine, which had been struck in 2010 and stipulated that Russia's lease of naval facilities in Crimea [then part of Ukraine] would be extended by 25 years beyond 2017 - until 2042. The accords also envisioned a $100 discount.

[Source: Itar Tass, Minsk, 26Aug14]

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