11:47 22.10.2014

Ukraine wants to formalize winter package by Naftogaz-Gazprom agreement, Russia says government resolution is sufficient - ministers

2 min read
Ukraine wants to formalize winter package by Naftogaz-Gazprom agreement, Russia says government resolution is sufficient - ministers

The main obstacle to reaching a compromise between Ukraine and Russia on gas supplies in the period until March 31, 2015 (the so-called "winter package") are disagreements about its formalization, as Kyiv insists on the signing of a legally binding document between Naftogaz and Gazprom, whereas Moscow thinks that a Russian government resolution providing a discount on the gas price under the current contract of 2009 is sufficient.

"This should be a legally binding document from the subjects of relations - Gazprom and Naftogaz. Gazprom refuses to draft a legally binding document," Ukrainian Energy and Coal Industry Minister Yuriy Prodan said at a briefing after talks in Brussels on Tuesday.

Russian Energy Minister Alexander Novak, in turn, said that there was no need to sign additional agreements between Gazprom and Naftogaz, especially in terms of their litigation at the Stockholm arbitration court, and that the only other option, apart from a Russian government resolution guaranteeing a six-month discount, could be an intergovernmental agreement between Ukraine and Russia.

"There should be no other options on providing the price of $385 [per 1,000 cubic meters], and they are not needed," Novak said after the talks.

Prodan said that Naftogaz invited Gazprom to jointly apply to the Stockholm arbitration court to remove fears that the signing of documents between the two companies on the "winter package" deal would influence the proceedings under the gas contract of 2009.

He added that even if the Russian monopoly rejects the proposal, Naftogaz would soon individually apply to the court, which has already formed a panel of arbitrators on the case, and hopes that its explanations in this regard will be given by the next round of consultations involving the European Commission, scheduled for October 29.

Prodan said that his counterpart in the talks, Novak, had already proposed a draft document for signature.

"I was very surprised when the [Russian] minister said: 'Sign a not legally binding document.' This is the minister's direct quote," he said.

Prodan said that the signing of an interim agreement between Naftogaz and Gazprom was also necessary, because under the current contract it would be problematic to organize gas supplies under the "winter package."

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