Gazprom: Gas supply to Ukraine must be resolved before transit contract can be discussed

The Russian gas monopoly Gazprom said that before a new transit contract with Ukraine can be discussed, arrangements for supplying gas to Ukraine must be made.

During a meeting with Russian President Vladimir Putin, Gazprom CEO Alexey Miller said that “the matter of the transit contract is extremely important, but nevertheless the primary issue is whether or not Ukraine will buy Russian gas on a direct contract”.

According to Miller, this will determine the capacity that Gazprom should guarantee for gas transmission to Ukraine.

Miller said that a direct gas supply contract would make it possible to reduced the gas price for the end consumer in Ukraine by 25%. “It’s a matter of bilateral negotiations between Russia and Ukraine,” he added.

On September 19, Ukraine, Russia and the European Commission on transit will hold trilateral negotiations in Brussels.

At the end of November 2015, Ukraine stopped buying natural gas from Gazprom, citing inflated prices. Ukraine is now importing from the west. Giving up Russian gas enabled Ukraine to start reforming the gas market and the corporate management of Naftogaz. For the first time in many years, the Ukrainian state-owned oil and gas company is no longer operating at a loss.

On December 22, 2017, the Arbitration Institute of the Stockholm Chamber of Commerce ruled that Naftogaz should resume purchasing at least 5 billion cubic meters of Russian gas before the contract expires.

At the end of February 2018, Naftogaz sent an advance payment for March in order to renew the supply from Russia, but Gazprom returned the funds and notified Naftogaz that it was initiating the process of terminating the gas supply and transit contracts.

  Russia, Gazprom, Ukraine, Naftogaz