EC-Russia-Ukraine Transit Talks Due May

Political talks on how to manage the transit of Russian gas across Ukraine are due to take place in Brussels this month between the energy ministers of Russia and Ukraine and the European Commission. An EC spokesperson told NGW that no date was yet confirmed, nor the names of the attendees. The last such round was in January this year.

The long-term contract governing transit terms and conditions expires in December, after which point nothing is fixed. However, there have long been disagreements over interpretation of the clauses as it stands, with the Ukrainian side frequently accusing Gazprom of not giving it notice of any abrupt rises and falls in pressure on the Russian side of the border, leaving Naftogaz to find out for itself.

There is also the much bigger question about money that Russia owes Ukraine, following a series of arbitration cases in Stockholm. Gazprom lost overall but has refused to recognise the 'asymmetrical' ship-or-pay and take-or-pay awards. It said Naftogaz was able to claim fundamental shift in the market for failing to stick to its gas take or pay commitments with Gazprom, but that no such recognition applied to Gazprom's reduction in gas transit volumes through Ukraine.

From January 1 2020, Ukraine's transit capacity will have to be sold under EU network rules, with short and long term contracts available. Gazprom will be hoping that Nord Stream 2 and TurkStream 2 will be ready sooner rather than later, but even so it will have to bring some gas through Ukraine.

Building NS 2 cannot be finished until the route is decided, and Gazprom has submitted two options to the Danish authorities. However, some senior European politicians do not want it ever to start. Transit fees bring in some $2.5bn/yr for the Ukrainian government, which owns the gas supplier and its transport network.

Ukraine has just had a presidential election, with the new president, the comic actor Volodymyr Zelensky, already appearing to be taking some of the credit for lower household gas prices, following decisions reached before his presidency began.