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Ukraine and Russia deal on winter gas

September 25, 2015

Ukraine and Russia have finalized an agreement providing Kyiv with gas supplies for the upcoming winter. A full agreement involving the European Commission is due to be signed shortly.

Ukraine Pipelines
Image: picture-alliance/dpa/S. Sauer

The deal between Russia and Ukraine provides Kyiv with gas supplies for the winter according to European Commission Vice President Maros Sefcovic, who brokered the talks. He said it assured supplies for Ukraine until next March.

Sefcovic said the new deal was initialed Friday in Brussels by Russian Energy Minister Alexander Novak and Ukrainian Energy Minister Volodymyr Demchyshyn.

The Russian Interfax news agency confirmed the deal had been initialed and a full agreement would be signed shortly involving Russia, Ukraine and the European Commission.

Sefcovic said Ukraine would pay $232 (207 euros) per thousand cubic metres of gas for supplies from Russia between October 1 and March 31. The price represents a reduction from the contractual price of $251 dollars according to Sefcovic.

Ukraine is to buy 2 billion cubic metres of gas for underground storage in October. Ukrainian energy supplier Naftogaz is to be provided with $500 million dollars by the Kyiv government to cover the cost.

The EU-brokered talks between Ukraine and Russia had started in March. There has been uncertainty over Russian gas supplies because of the wider conflict between Moscow and Ukraine after Russia annexed Crimea from Ukraine and lent support for rebels in eastern Ukraine.

There had been gas supply cut-offs in the past and a dispute in 2009 caused serious disruptions in shipments of Russian gas to EU countries as well.

The deal will also secure gas supplies for European customers according to Russian Energy Minister Alexander Novak. About half of the Russian gas imported into Europe has come through Ukraine in recent years. Russian gas accounts for about 15 percent of Europe's total consumption of gas.

Other Russian gas exports to Europe go through Nord Stream, an offshore natural gas pipeline from Vyborg in the Russian Federation to Greifswald in Germany. It is owned and operated by Nord Stream AG whose shareholders include Gazprom, Wintershall, Germany's largest crude oil and natural gas producer and E.ON Ruhrgas.

jm/lw (dpa, AP)