Ukraine Gas Transit Agreement

“Ukraine`s priority is to sign a long-term agreement with certain gas transport volumes to ensure stability in European energy markets and lower prices for end consumers,” Ukraine`s energy ministry said in a statement this week. Some disputes resolved, but not all The new agreement, according to Zelenskiy, provides that “both parties retain the right to renew the contract for another 10 years” after its expiry. Russia is also part of the new treaty, which agrees to pay $2.9 billion to Ukraine as part of a Stockholm arbitration supplement, which Moscow did on December 27. In return, Naftogaz promised to release Gazprom`s confiscated assets in Europe, and both sides agreed to abandon mutual legal actions that have not yet been completed and to sign an out-of-court settlement. However, state-level prosecutions, in particular Naftogaz`s claims against Russia concerning the confiscation of the company`s assets during the annexation of Ukraine`s Crimea peninsula, are not affected by the new transit treaty. On 21 December, Gazprom and Naftogaz said they had reached an interim agreement on the new agreement on the shipment of Russian gas by Ukrainian gas pipelines. But technical and other discussions on the details continued until the signing was announced. Earlier this month, Gazprom agreed to pay about $2.9 billion to Naftogaz in Ukraine to settle a long-running transit rights dispute. Under the transit agreement, Ukraine is expected to ship most of the gas to Central Europe and Moldova. “The (signed) documents are in effect from today and provide for a transit of Russian gas via Ukraine after 31 December 2019.” Representatives of Russia and Ukraine met in Berlin for “very intense negotiations” on the 10-year gas deal, which expires in two weeks. However, the terms of the agreement are not yet clear.

After intense negotiations, Russia and Ukraine signed a five-year agreement on the transit of Russian gas to Europe before the deadline. The agreement negotiated in Vienna was confirmed on 30 December by Russian and Ukrainian gas companies and Ukrainian President Wolodymyr Zelenskiy in a social post. The current agreement was due to expire on 31 December and has compromised Europe`s vital link with billions of cubic metres of gas from Russia via Ukrainian gas pipelines in the depths of winter. About 40% of the 200 billion cubic metres (bcm) of gas sent each year by Russia to Europe has been transferred through The vast network of Ukrainian gas pipelines. Energy relations between the two neighboring countries are part of a wider geopolitical struggle with the military occupation — Russia invaded Ukraine`s Crimea peninsula in 2014 and backed separatists in the east of the country – allegations of cyberwarfare, propaganda and international complaints about human rights violations and embezzled assets. According to the European Union (EU) official, the agreement covered “all the key elements” and said it was “very good news and very positive for Europe, for Russia, for Ukraine, for the gas markets and for the citizens of all countries”. “After these very intense discussions, I am very pleased to be able to say that we have reached an agreement in principle on all the key elements,” Sefcovic said, adding that further details of the agreement would be discussed on Friday. Under the new contract, Kiev expects next year to ship a minimum of 65 bcm, or about 22 bcm less than in 2018. Minimum amounts will continue to decline to 40 bcm in 2021-24. The new agreement has a “pump or pay” clause, which means that Russia must pay the minimum fee for gas transit, even if it does not pump the contractually agreed quantities across Ukraine, said Yuri Vitrenko, executive director of the Ukrainian state Naftogaz, on Facebook.