17:32 31.05.2016

Gazprom cautions Kyiv against prohibitive gas transit tariffs, seeks negotiated agreement

2 min read
Gazprom cautions Kyiv against prohibitive gas transit tariffs, seeks negotiated agreement

Gazprom is ready to hold negotiations on future transit of Russian gas through Ukraine, Deputy CEO Alexander Medvedev said at a press conference on Tuesday.

The transit rate is currently defined under Gazprom's existing long-term contract with Naftogaz Ukrainy for 2009-2019. It sets out a formula incorporating a fuel component value and inflation in Europe. Last year, Ukraine approved a law on the market in natural gas, which introduced the standards of EU energy law, under which the transit tariff was established by the national regulator. The size of the possible effective tariff was not officially aired but, according to statements from Ukrainian officials, the tariff is slated to rise by 50%.

"It is very strange to run into a situation, despite the existing contract, where the Ukrainian colleagues, out of the clear blue, without any justification, unilaterally, announce a tariff increase. To a level I cannot find arguments for. Do they want to make Ukrainian transit unappealing in general? So that we lose our desire to transit, period? Because economic factors have great significance," Medvedev said.

"We have worked on and will work on this contract. There are arbitration processes in Stockholm. If no agreement is reached, we will resolve it in arbitration," he said.

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