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Gas talks in limbo

October 30, 2014

EU-hosted talks to resolve a gas dispute between Russia and Ukraine were broken off after Kyiv failed to prove it can pay for vital winter supplies. Moscow has now urged Brussels to provide necessary guarantees.

https://p.dw.com/p/1DeHo
Aleksandr Novak EU Energie Brüssel Gas Gespräche Ukraine Russland
Image: picture-alliance/EPA/Olivier Hoslet

The EU-brokered gas talks between Ukraine and Russia were adjourned after running late into the night on Wednesday, but are set to resume on Thursday.

Russian Energy Minister Alexander Novak told Russian news media that the sticking point in the talks was Kyiv's inability to provide a written guarantee for its next gas payments.

"We were told that Ukraine is looking for the means to pre-pay a gas supply of 4 billion cubic meters. Once there is money, there will be gas," Novak said.

In addition, Sergei Kuprianov, spokesman for Russian gas giant Gazprom, called on the European Commission to reach a financing agreement with Ukraine.

"Otherwise, negotiations make no sense," he told the AFP news agency on Thursday.

Moscow cut off vital gas supplies in June as the conflict with Ukraine and Western countries deepened. The supply cut has had little impact this summer, but pressure is mounting for a deal as temperatures start to drop below freezing.

Insecure funding

Moscow demands that the new pro-Western government in Kyiv pay sharply higher prices in advance for new deliveries after it ran up an unpaid bill of $5.3 billion (4.1 billion euros).

Ukraine's Naftogaz company is said to have set aside $3.1 billion in a special escrow account to pay off a chunk of its debt. Moreover, Kyiv said it was working to raise funding from all possible sources, including the European Union, which is currently considering a request for a loan of 2 billion euros.

Ukraine relies on Russia for around 50 percent of its own gas and despite storage has a winter shortfall of around 3 billion to 4 billion cubic meters, depending on the weather.

uhe/ng (dpa, Reuters, AFP)