Russia and Ukraine failed to reach an agreement on the flow of natural gas between the two countries, effectively cutting off Russian supply to Ukraine starting Wednesday. However, Russia said that the supply to Europe would not be affected.
Russian Energy Minister Alexander Novak, Ukrainian Energy Minister Vladimir Demchyshyn and Andriy Kobolev, CEO of Ukrainian state energy firm Naftogaz, met yesterday in Vienna for trilateral talks with the European Commission, which acted as mediator. While the two countries could not agree on a deal it was agreed the failed talks would not affect Europe’s supply of natural gas, which goes through Ukraine.
“There was a clear commitment from Ukraine and Russia to make sure gas transit to Europe will continue,” European Commission Vice President Maros Sefcovic said, according to Reuters.
Demchyshyn said that the next round of talks to secure a new deal would begin in September. Novak described the decision to stop the purchases as “political,” Radio Liberty reported.
Russia hiked its gas prices for Ukraine after the February 2014 overthrow of former president Viktor Yanukovych. Moscow had offered to keep the same $247 per thousand cubic meters price that it charged Ukraine through the end of September, which represents a $40 discount on the price that had been agreed upon in a prior agreement. But Novak had called for a discount of at least 30 percent, Agence France-Presse reported.
The new agreement would have replaced the current winter package, which ended on March 30 and was partially extended through the end of June.
Sefcovic said that Ukraine’s gas storage levels were at 12 billion cubic meters now, but needed to be around 7 bcm higher to prepare Ukraine for the coming winter.
“We have agreed the Commission will put forward ideas to prepare next steps so that the next consultation could take place. We will use the summer to start preparing the next winter season,” he said, according to Energy Live News.
Source: Wall Street Journal