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    Moscow Accepts EC Approach over Ukraine

Summary

The EC is working with Russia and Ukraine to try to resolve the gas supply and transit contract dispute, after Moscow found the decisions from Stockholm economically disadvantageous.

by: William Powell

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Moscow Accepts EC Approach over Ukraine

The European Union's commissioner for the energy union Maros Sefcovic has approached the Ukrainian and Russian authorities over the stand-off on Russian gas deliveries and met with positive results.

In a March 4 statement, the European Commission (EC) said that both Ukraine and Russia have confirmed their readiness to stay in close contact with the EC and that Sefcovic would "follow the situation closely in order to ensure that the transit of Russian gas through Ukraine to the EU – as it remains our priority – is safeguarded at all times."

Russia's energy minister Alexander Novak said the transit of gas to the EU was safe. Regarding the Stockholm Arbitration decision, Sefcovic has been informed that Gazprom remains set to terminate its contracts with Naftogaz. This procedure may, however, take some time and will not have immediate consequences on the gas flows, the EC said.

All existing commitments to supply and transit gas to the EU are being honoured, the EC said.

Naftogaz has told Sefcovic that the Ukrainian population was taking less gas for heating, and that it has bought some gas from Poland for domestic purposes, the statement said. The EC has also involved the European Network forTransmission System Operators for Gas (ENTSOG) in monitoring and helping resolve the situation.

The Stockholm decision is confidential, so both Naftogaz and Gazprom can quote selectively from it. Gazprom's take is that the findings went against it in order to protect the already fragile Ukrainian economy, and so the balance of mutual commercial interests was lost. 

Gazprom CEO Alexei Miller said March 2 that the judges argued the Ukrainian economy had worsened significantly since the contracts were signed, and he said it was not Gazprom's job to solve the problem. "In such a situation, it is not economically profitable for Gazprom to continue with the contracts," he said.