Delegations of Ukraine, Russia and the European Commission have discussed terms for Russian gas transit after the expiration of the current contract between Naftogaz and Gazprom on 1 January 2020 during another round of trilateral negotiations today in Brussels.

The Commission presented a detailed proposal regarding the new long-term contract for Russian gas transit through Ukraine after 2019. The Ukrainian side supported this proposal as constructive.

The key provisions of the common position include the conclusion of the new long-term contract with fixed transit volume sufficient to ensure secure operation of Ukraine’s GTS. The contract should be concluded with Ukraine’s new transmission system operator (TSO), which is to be unbundled from Naftogaz group since 1 January 2020. Future relations between the new Ukrainian TSO and Gazprom should be based on European energy law being implemented in Ukraine as an Energy Community member.

According to Naftogaz CEO Andriy Kobolyev, the same principles underlie Gazprom’s cooperation with all its counterparties in the EU. He is confident that switching to common European rules will significantly facilitate cooperation between the Russian company and Ukraine.

The Ukrainian side also invited Gazprom to participate in public hearings run by Ukraine’s energy regulator to discuss and share their view on the new tariff-setting methodology. It is based on the EU tariff network code and is expected to be in effect for the next 5-year period.

During the negotiations, the Russian side raised the unsettled issues between Naftogaz and Gazprom regarding the arbitration disputes. Naftogaz suggested that Gazprom should send a formal communication with its vision of how to settle its nearly USD 3 billion debt arising from the Stockholm arbitration and address other unresolved issues. Naftogaz has not to date received any formal proposals from the Russian company regarding the above-mentioned.

“We are grateful to the Commission and to Mr Sefcovic personally for their great effort to find a compromise and for their support of Ukraine’s firm position regarding the introduction of transparent European rules for Russian gas transit through Ukraine as the sole possible solution,” Andriy Kobolyev said.

The next trilateral meeting is expected to be held in November.