Ukraine prepared to extend gas transit agreement with Russia under European rules

Andriy Kobolyev, CEO of Ukraine’s national oil and gas company Naftogaz, said in a press conference after trilateral negotiations in Brussels that the company is willing to extend the current agreements to transit Russian gas through Ukraine after 2019 if they comply with European regulations.

“Naftogaz is willing to consider future agreements only if they completely abide by the European legislation that has been implemented in Ukraine,” Kobolyev said.

He added that Naftogaz is open to all possibilities, provided they align with the arbitration ruling made in Stockholm and stipulate that the Russian company will fully meet all its obligations according to the two lost lawsuits.

Ukrainian Foreign Minister Pavlo Klimkin also observed that the situation has changed, since Ukraine now has different legislation.

“The Russian side doesn’t even consider that we now have absolutely different legislation, different regulations and different laws, which mirror EU legislation,” he added.

Earlier, Kobolyev said that maintaining transit is the primary task of negotiations with Russia’s Gazprom, and that the Ukrainian company will insist on signing the contract according to European law, in order to ensure volumes and guarantee compliance. Kobolyev noted that, without a new contract, Gazprom may stop transit in 2020. The current contract for transporting Russian gas to the EU, signed in 2009, expires on 1 January 2020.

Naftogaz said that it is prepared to reduce its lawsuit claims against Gazprom from $12 billion to $2 billion if a new long-term gas transit contract is signed. The Russian company, on the other hand, is only willing to extend the contract if the legal disputes between the companies are resolved.

On 28 February 2018, the Arbitration Institute of the Stockholm Chamber of Commerce ruled in favor of Naftogaz that Gazprom owes it $4.63 billion in compensation for failing to supply the contractually agreed volumes of gas for transit. Taking into account Naftogaz’s outstanding debts, Gazprom owes the Ukrainian company a balance of $2.56 billion.

  Ukraine, Russia, Naftogaz of Ukraine, Gazprom, Kobolyev, EU