Mediaboss Marketing

Ukraine and Russia will probably meet within two weeks for the next round of European Union-brokered talks to resolve a natural-gas dispute before winter, Ukrainian Energy Minister Yuri Prodan said.

The EU, which depends on Russian gas piped through Ukraine for about 15 percent of its demand, proposed an interim deal at negotiations last week to restore flows from Moscow-based OAO Gazprom to NAK Naftogaz Ukrainy before the heating season.

Under the EU proposal, which Russian Energy Minister Alexander Novak on Sept. 26 called a big step toward an agreement, Ukraine would pay $3.1 billion by the end of the year for previously delivered supplies and Russia in return would provide at least 5 billion cubic meters of gas to Ukraine in the coming months.

The trilateral talks will be held either at the end of the next week, which is probably unlikely, or a week later, Prodan said in an interview in Brussels today. Were ready to reach an agreement, but not at the volumes and in the timeframes set by Russia.

The temporary accord the EU is trying to broker is aimed at restarting supplies from Russia to Ukraine after they were halted in June and at preventing disruptions in the heating season until the international arbitration court in Stockholm, Sweden decides on Gazprom and Naftogaz claims in a price dispute. If the three-party talks fail, the arbitrator could make a provisional ruling in two to four weeks, Prodan said.

Arbitration could make an interim decision given the heating season and an urgent need to take action to resolve the situation temporarily, Prodan said. If the trilateral talks end successfully, the court would decide on the gas contract issue as a whole, according to the minister.

The European Commission has proposed an interim solution, which national leaders of Russia and Ukraine must approve. The two countries will exchange their responses to the commissions plan and report back to Brussels by Oct. 7, Prodan said. The commission will then integrate their positions into a single document as far as this is possible, leaving other points for the next round of talks, he said.

The draft agreement envisages that Ukraine would pay $385 per 1,000 cubic meters for gas for the next six months. Thats the price that Gazprom had said was its final offer and at the highest level the EU had previously said should be paid. Its higher than the $268.50 Ukraine had paid before the conflict with Russia, which began with the ousting of Ukraines Kremlin-backed President Viktor Yanukovych amid street protests in February.

In April, Russia rolled back two price discounts amid a growing conflict in which Russian President Vladimir Putin annexed Crimea and a separatist insurgency erupted in eastern Ukraine. As a result, Russia raised the gas price for Ukraine to $485 per 1,000 cubic meters, a level higher than for any EU nation.

Those arent market conditions, thats an element of pressure, discrimination, Prodan said.

See the article here:
Ukraine Sees Gas Talks With Russia, EU Within 2 Weeks