Gas from Russia during transit via Ukraine after Jan 1 without new contract will be pumped into UGS until documents signed
If gas transit from Russia through Ukraine continues after January 1, 2020 and if there is no corresponding contract, it will be pumped into Ukrainian underground gas storage facilities (UGS) until the relevant documents for the resources are signed, Executive Director of Naftogaz Ukrainy Yuriy Vitrenko has said.
"Gas without documentation that will enter Ukraine will be pumped into underground gas storage facilities as "gas from an undetermined owner," while this gas is documented," he wrote on Facebook.
As reported, on January 1, 2020 the ten-year transit contract between Naftogaz and Gazprom terminates. The European Commission has already proposed to Gazprom the option of signing a transit contract for ten years with an annual volume of 60 billion cubic meters that was supported by the Ukrainian side.
At the trilateral negotiations held in Brussels in September, the Ukrainian side presented the future operator of the Ukrainian gas transportation system, Gas Transmission System Operator of Ukraine LLC or TSO of Ukraine, which handed over draft agreements on cooperation between operators of adjacent gas transmission systems to the Russian delegation, as well as a standard transportation agreement. In addition, Naftogaz handed over a roadmap to complete the unbundling of the TSO of Ukraine to Russia.
On November 18, 2019, Gazprom sent an official proposal to Naftogaz Ukrainy to extend the current contract or sign a new one on the transit of natural gas through Ukraine for the period of one year, taking into account projected demand of European buyers on gas in 2020.
In the proposal, Gazprom indicates that a necessary condition for extension of the existing contract or concluding a new one must be a waiver by both sides of all mutual claims in international arbitration and a cessation of all legal disputes.
Naftogaz responded to Gazprom by saying a new gas transit contract between Gazprom and the operator of the Ukrainian gas transmission system must comply with European rules. Naftogaz is also willing to consider receiving natural gas from Gazprom instead of the roughly $3 billion the latter owes under decisions of the Arbitration Institute of the Stockholm Chamber of Commerce.