News

2019.12.31 13:56

Kyiv and Moscow finalise gas transit deal following strenuous talks

LRT.lt 2019.12.31 13:56

Russian and Ukrainian gas companies say they have reached an agreement on transit of Russian natural gas to Europe. The contracts were finalised late on Monday, just 24 hours before the current deal expires.

Ukrainian President Volodymyr Zelensky has welcomed the agreements which he said ensured his country's “energy security and well-being” and let “Europe know that we won’t fail it when it comes to energy security”.

He also said on Facebook that the deal would allow Ukraine get at least 7 billion US dollars in transit payments from Russia over the next five years.

Russia’s state-controlled gas giant Gazprom and Ukraine’s Naftogaz described the slew of agreements as a hard-won compromise that followed five days of strenuous talks, AP reports.

Earlier this month, Moscow and Kyiv reached a tentative deal on shipping 65 billion cubic metres of natural gas through Ukraine in 2020 and 40 billion cubic metres annually thereafter.

The Lithuanian Ministry of Foreign Affairs has commented that Vilnius consistently supports Ukraine's aspiration to remain a gas transit country and that the reached compromise “is not the worst option”.

“However, the agreed transit volumes will not fully use the capacity of Ukraine's gas infrastructure [...] and Ukraine's transit income will decrease,” the Foreign Ministry said in a statement to LRT.lt, noting that 40 billion cubic metres represent only one fourth of the country's capacity.

Russia sends roughly 40 percent of its gas deliveries destined for Europe through Ukraine, but has been working to build new transit routes bypassing Ukraine.

These include the prospective Nord Stream 2 undersea pipeline between Russia and Germany which has been harshly criticised by a number of countries, including Lithuania. The United States has passed a package of sanctions against companies involved in the project, leading to a Swiss constructor laying sections of the pipeline to suspend work.

However, Russian officials have said that Gazprom has enough assets to complete Nord Stream 2 next year.

The Ukraine-Russia gas deal also envisaged payment by Russia of 2.9 billion US dollars to settle an arbitration claim resulting from previous transit disputes and waived any other claims related to the 2009 transit contract.