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31.10.2014 14:22
Breakthrough in Gas Talks to Guarantee Supply for Ukraine, EU
Ukraine would settle its debts based on a preliminary price of USD 268,5/1000 cub. m by making payments in two tranches: USD 1,45 billion without delay, and USD 1,65 billion by the end of the year 2014
AUTHOR: publics.bg

  • Oettinger and Miller discuss prior to the deal signing
    © ec.europa.eu

After seven rounds of gas negotiations, talks moderated by Günther H. Oettinger, Vice-President of the European Commission, finally yielded a breakthrough: A 4,6 billion dollar winter package, agreed by Russia and Ukraine, secures gas for Ukraine - and ultimately also for Europe.

Ukraine would settle its debts based on a preliminary price of USD 268,5/1000 cub. m by making payments in two tranches:  USD 1,45 billion without delay, and USD 1,65 billion by the end of the year 2014. This adds in total up to 3,1 billon dollar of debt payment. The final price and thus the final sum of debt will be determined through the pending arbitration by the Arbitration Institute of the Stockholm Chamber of Commerce between Gazprom and Naftogaz.

Russia will deliver gas following advanced, monthly payments by Ukraine. The price is below USD 385/1000 cub. m and calculated according to a formula in the present contract and a price reduction through a discount in export duties by the Russian Federation. Ukraine is free to order as much gas as it needs and is not subject to take-or-pay obligations foreseen in the current contract. Ukraine foresees to purchase 4 bcm until the end of the year 2014, meaning USD 1,5 billion.

José Manuel Barroso, President of the European Commission who witnessed today's signing of the winter package, said: "I am delighted that I can announce a major success at the end of my mandate as President of the European Commission. With our strong support, Ukraine and Russia have today found agreement on their outstanding energy debt issues, and on an interim solution that enables supplies to continue this winter. I am glad that political responsibility, the logic of cooperation and simple economic sense have prevailed."

Günther H. Oettinger, Vice-President of the European Commission, said: "This breakthrough will not only make sure that Ukraine will have sufficient heating in the dead of the winter. It is also a contribution to the de-escalation between Russia and Ukraine."


TAGS: gas talks | Ukraine | Russia | EU | gas supply | energy security | natural gas | Gazprom | Naftogaz 


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