09:45 22.10.2014

Decision on winter package for Ukraine yet to be made, next meeting due on Oct 29

2 min read
Decision on winter package for Ukraine yet to be made, next meeting due on Oct 29

The latest round of trilateral negotiations between Russia, Ukraine and the European Commission failed to arrive at a final solution but took another step in that direction.

European Energy Commissioner Gunther Oettinger told a press conference at the end of the talks that the next round had been scheduled for October 29 and would take place in Brussels.

He said they had not made a breakthrough but added, "We have made some important progress. We hope they will reach an agreement on a winter package for Ukraine" next week.

Oettinger said the sides agreed that the "take or pay" principle would not apply to Russian gas supplies in the winter season. The principle was earlier discussed as a mandatory condition.

"After the analysis conducted by all participants of the negotiations, we have come to a conclusion on what volumes would be delivered to Naftogaz until the end of a year - this is approximately 4 billion cubic meters of gas," the European commissioner said.

There is still no answer to the question where the money for pre-paying current deliveries will come from. The provision of these funds will require a profound analysis of the Ukrainian financial status by the European Commission. Oettinger said the amount would depend on the outcome of "a thorough examination of the budget situation of [Ukrainian gas company] Naftogaz and Ukraine," intensive contacts with the IMF and a due account of EU financial assistance programs for this and next years.

If Naftogaz is unable to pay, the European gas company can buy gas as an intermediary and sell it to Naftogaz, Oettinger said.

He added that Naftogaz had committed to pay $1.45 billion by the end of October for gas supplied in 2013 and another $1.6 billion by the end of the year. The total payment will stand at $3.1 billion.

In turn, Russian Energy Minister Alexander Novak said, "Ukraine has not confirmed sources to fund the current deliveries. The European Commission has not confirmed the sources of funds it may allot either."

The minister said a bridge loan and funds of the EBRD, the European Investment Bank or the European Commission budget may be used in paying for the current supplies. But "that will require a study of the Naftogaz solvency and liquidity to support the financing of current deliveries," he said.

AD
AD
AD
AD
AD