BRUSSELS – The European Union, Ukraine and Russia agreed to work out a new contract for transit of Russian gas through Ukraine to EU countries.
This political decision was reached on July 17 in Berlin, after the first round of trilateral gas talks with the participation of Vice-President of the European Commission for Energy Union Maros Sevcovic, energy minister of Russia Alexander Novak, foreign minister of Ukraine Pavlo Klimkin, CEO of Russia’s Gazprom Alexey Miller and CEO of Ukraine’s Naftogaz Andriy Kobolev.
“We start out trilateral dialogue with Ukraine and Russia on how to make sure that gas transit through Ukraine will continue in the post-2019 period. I’m very much encouraged that we have such high-level participation,” said Sevcovic who initiated the negotiations.
The talks closely followed the NATO Summit, where one of the most-discussed issues had been the Nord Stream 2, the Russian project of an offshore gas pipeline, which would deliver gas from Russia to Germany bypassing Ukraine and could potentially deprive the Ukrainian government of up to $2 billion in transit revenues annually. Russia plans to complete the construction of Nord Stream 2 by the end of 2019.
Sevcovic told journalists that the trilateral negotiations between the EU, Russia and Ukraine will continue on the political and experts levels. The experts will meet in September and the second round of the gas talks on the political level will take place in October.
According to Sevcovic, the sides identified four key issues for the experts to discuss, including “the EU’s gas needs for the next decade; ways in which the EU law applied in Ukraine would impact the future transit contract; a certified transmission system operator in Ukraine; and how the EU legislation would be transposed into the tariffs-setting mechanism of transition gas from Russia through Ukraine to the EU.”
Sevcovic said that it was of vital importance “to have everyone around one table and start building trust”.
“As you know, time is passing quickly and every day we are getting closer to the end of 2019,” he said. “You all know the fundamental question – whether on Jan. 1, 2020, we will have an agreement on the long-term transit of Russian gas to the EU through Ukraine in a commercially viable manner. Therefore, I appreciate the high-level participation from both Russia and Ukraine, which was necessary to start this process going – I hope that we will continue to see a firm commitment on both sides to reach an agreement at the end of this process.”
He believes that a trilateral process is “the most effective platform to seek a satisfactory solution for the gas matters important for involved parties”.
“We need a new type of contract, a future-oriented contract which will be fully compatible with European legislation,” Sevcovic said.
Sevcovic also said that the discussion in the room “was future-oriented and positive.”
“(It was important to) make sure that we will be framing the future contract in this modern forward-looking way was quite important and I think that this is what we should take away from today’s meeting. We are looking to the future, we have a positive agenda and we want to deliver a good result,” he said.
