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16 August 2017
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Confusion surrounds Russia-Ukraine gas deal

Subsequent comments from Moscow and Kyiv have blurred the lines

Andris Piebalgs, the European Union`s energy commissioner, has welcomed an announcement that Ukraine and Russia have resolved a dispute over gas trade. But recent comments from Moscow and Kyiv have thrown the details of the agreement into confusion, according to EurActive.

The deal, announced on Tuesday (12 February), displaces RosUkrEnergo as the sole trade intermediary between the two countries and replaces it with a 50-50 joint venture by Gazprom and Naftogaz, the gas monopolies of Russia and Ukraine respectively.

The agreement aimed to settle a dispute over the payment of natural gas arrears by Ukraine with Gazprom threatening to cut deliveries if Kyiv failed to settle its debt before Tuesday. The dispute was reminiscent of a January 2006 row that saw deliveries to Western Europe briefly interrupted, highlighting the EU`s dependency on Russian gas imports.

"I welcome the agreement between Russia and Ukraine today for the solution of their bilateral gas dispute," said Piebalgs on Tuesday, expressing his hope that the deal would "establish the basis for a stable and solid bilateral energy relationship" between the two countries.

But subsequent comments from Moscow and Kyiv have blurred the lines. On Wednesday, Gazprom`s chairman Dmitry Medvedev suggested that intermediaries will need to be retained to ensure a smooth transition to the new system. And one prominent Ukrainian politician, Anatoliy Hrytsenko, one of the leading figures in the `Orange Revolution`, said the deal will not help improve transparency in gas trade between the two countries.

"Now Gazprom will become an even more powerful player, with the chance to have even greater influence on our internal market," Hrytsenko said, according to Reuters. "This is clearly not in Ukraine`s interest."

The companies involved in the agreement - Gazprom, Naftogaz and RosUkrEnergo - have so far refused to divulge the full details of the deal, further adding to the confusion in Brussels.

"I will shortly be in contact with our Ukrainian and Russian counterparts to find out further details of the agreement," Piebalgs said.

EurActive

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