Media: Russia's Gazprom and Ukraine's Naftogaz negotiate new contract
The newspaper Vedomosti has reported that Gazprom and Naftogaz Ukraine are discussing terms for a new gas transit contract through Ukraine to Europe. The newspaper cited two sources close to parties involved in the talks.
According to the publication’s sources, the talks are about concluding a new contract in 2020. The question of the continuation of gas transit after 2019, said one of them, was raised at a meeting of representatives from both companies a few weeks ago.
"The contacts regarding the period after 2019 have been initiated," Vedomosti quotes its source as saying. Negotiations are in early stages. "We have asked [Gazprom] the question what [in their understanding] ‘attractive commercial conditions’ means," the source close to Naftogaz told the newspaper.
On April 10, Gazprom's Chairman, Alexey Miller, said that his company will not refuse to transport gas through Ukraine, but that its volumes in the future would be reduced to 10-15 billion cubic meters per year. "The Ukrainian side must justify the economic feasibility of a new transit contract," he said.
In late February, the Stockholm Chamber of Commerce’s Arbitration Court ruled on the dispute between Gazprom and Naftogaz. Its decision partially satisfied the demands of the Ukrainian company. The Court ruled that Gazprom should pay Naftogaz $4.63 billion for the shortage of gas under the transit agreement. Prior to that payment, the Arbitration Court ordered Kyiv to pay Gazprom $2 billion for gas already delivered plus interest on arrears. Thus, Gazprom was left to pay Naftogaz a net sum of approximately $2.6 billion.
After Stockholm court’s decision, Gazprom announced that it would begin to terminate its agreements on the supply of gas to Ukrainian consumers and on the transit of gas to Europe. Both contracts are valid until the end of 2019. At the end of March, negotiations were held between Gazprom and Naftogaz on the termination of said contracts, said Gazprom Deputy Chairman Alexander Medvedev. The Russian company has also appealed the Stockholm Court’s decision.