European Commission steps in to save Russian gas transit through Ukraine

The European Commission has proposed a 10-year contract for the transit of Russian gas through Ukraine as of January 1, 2020. The initiative will be discussed during trilateral ministerial negotiations that the European regulator intends to hold on September 16, reports TASS news agency, citing a diplomatic source in Brussels.

The source claims that Maros Sefcovic, Vice President of the European Commission’s Energy Union, sent the relevant letter to Moscow and Kyiv last week. “Both parties have already indicated their fundamental willingness to talk,” the source said, noting that no specific meeting date had been set yet.

On July 26, Russian Energy Minister Alexander Novak said that Moscow has advised Kyiv to extend the gas transit contract for one year under its current terms. He said that if there are any adjustments to the agreement, it is a matter of commercial negotiations between the companies in question – Russia’s Gazprom and Ukraine’s Naftogaz.

The companies’ current 10 year gas transit contract expires at the end of 2019.

On July 28, it was reported  that Moscow offered Kyiv to sign a short-term contract on gas transit to Europe after 2019. By doing so, Russia hopes to buy time to complete its Nord Stream 2 and Turkish Stream gas pipelines, which circumvent Ukraine and will deprive the country of its status as the primary transporter of Russian gas.

At the same time, Ukraine is actively seeking a replacement for Russian gas. Serhiy Makohon, director of the company that operates Ukraine’s gas transport system, said recently on Facebook that his company and Naftogaz are working on a joint plan to supply Ukraine with gas through the Trans-Balkan pipeline as early as January 2020.

A few days ago, the US Senate’s Foreign Relations Committee ratified a bill to impose sanctions on the Nord Stream 2 gas pipeline. The bill still needs to be voted on in the Senate, then in the House of Representatives and then, if approved, it will be given to President Donald Trump to be signed.

The Nord Stream 2 pipeline, which is being laid along the bottom of the Baltic Sea, is designed to supply gas directly from Russia to consumers in Europe. The project will provide an alternative supply route if the gas transit contract between Russia and Ukraine is not extended after December 31 this year.

The new bill proposes sanctions on any entities involved in the sale, leasing or any other provision of vessels for the laying of pipes for Nord Stream 2 at a depth greater than 30 meters. Such entities will be banned from entering the US, and all their assets in the US’s jurisdiction will be frozen.

  Russia, Ukraine, EU, Gazprom, Naftogaz

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