EU Energy Commissioner Guenther Oettinger hopes a deal can be reached at the start of next week.
Bloomberg/Moscow
Russia, Ukraine and the European Union moved closer to a deal on gas payments to OAO Gazprom, pledging more talks next week to avoid disrupting fuel supplies.
While there was no breakthrough, progress was made and there’s hope an agreement can be reached at the start of next week, EU Energy Commissioner Guenther Oettinger said yesterday after three-way talks in Berlin. Ukraine transfered $786mn today to pay for gas delivered in February and March, which Gazprom should receive on June 2, creating the basis for further discussions, he said.
Gazprom had demanded Ukraine pay in advance for gas supplies in June after running upbns of dollars in debt. Ukraine had refused to pay because Russia increased gas prices 81% in the second quarter as the crisis between the two countries worsened.
Ukraine depends on Russia for half its gas, making energy a battleground in the wider political struggle between the two countries. About 15% of Europe’s annual gas demand crosses Ukraine in Soviet-era pipelines. Rows over prices and debt between the two sides held up European supplies during freezing weather in 2006 and 2009.
Ukraine’s debt will have reached $5.2bn by end of this month, according to Gazprom, and Russia had sought $1.7bn in advance payments for June shipments. That’s due by June 2 and, starting from the following day, Ukraine will only get what it pays for, Gazprom has said. Ukraine, which is seeking a price of $268.5 a thousand cubic meters, will make a proposal on debts on June 2, giving hope a deal can be reached by the time the deadline passes, Oettinger said yesterday.
“We haven’t reached a breakthrough, but we made progress today and I think a solution is possible on Monday,” Oettinger said at a press conference.
Russia is ready to resume talks on gas prices and debt after receiving money, Russian Energy Minister Alexander Novak said at the press conference. Russia hopes to avoid moving Ukraine to prepayment terms, he said.
Earlier this week the European Commission drafted a plan to solve the debt dispute, but a deadline for May 28 set by the EU passed without agreement.Talks in Berlin aren’t expected to lead to progress, Ukrainian First Deputy Energy Minister Yuri Zyukov said yesterday. Russia is unfortunately now an “enemy” and “speaks in ultimatums,” he said.