Russia sets conditions for Ukraine gas deal as EU lays out new framework

Russia’s energy minister, Aleksander Novak, has said that securing a gas deal with Ukraine should be part of a package that also includes the resolution of legal disputes between Russian energy giant Gazprom and Naftogaz, Ukraine’s national energy holding.

Speaking after the second round of EU-mediated talks on October 28, Mr Novak said that Russia supported an “end-to-end” solution which includes issues related to Russian gas supplies directly to Ukrainian consumers, bypassing reverse, gas transit to Europe and the settlement of litigation.

“[The Russian position] implies in particular that some judicial claims should certainly be removed from the agenda if we’re talking about an agreement,” Russian presidential spokesperson Dmitry Peskov told the press.

Mr Peskov pointed to an ongoing legal dispute between Naftogaz and Gazprom in which the Stockholm Arbitration Court obliged the Russian gas giant to pay 2.56 billion US dollars to Naftogaz following litigation over gas supplies and transit contracts.

Ukraine reportedly responded by rejecting the idea of a “package solution.”

The Ukrainian press reported that the EU proposals were “based on a 10-year contract, as well as on volumes of 60 billion cubic meters of stable volumes and 30 billion cubic meters of variable volumes of gas transportation.”

Ukraine’s energy and environmental protection minister, Oleksiy Orzhel, endorsed the EU’s new framework.

Ukraine and Russia have now been in talks for a month to negotiate a new gas deal.

The current deal will expire by the end of the year. The new deal could see Ukraine secure its gas transit role towards Europe, as well as restoring gas purchases from Russia that were stopped in 2015.

In fear of not agreeing with the Russia side, Naftogaz has so far secured 21.5 billion cubic metres of natural gas for the next heating season.

The next round of talks are expected to take place at the end of November.