EU expects trilateral gas talks with Ukraine, Russia in late September

The EU Commission has sent to the Ukrainian and Russian governments its proposed solution to the natural gas dispute between the two countries and a list of steps that needs to be taken to conclude a new agreement, EU energy official Miguel Arias Canete told journalists on Aug. 20. He said the Commission will discuss the document with Ukraine’s energy minister on Aug. 27 and then with the Russian side in early September, the Interfax-Ukraine news agency reported. Should positions coincide, a trilateral meeting could be called to conclude a deal in late September.

Recall, Ukraine stopped importing Russian gas since 3Q15 after rejecting prices proposed by the Russian government. In particular, Ukraine expected to get a 30% discount to the base price of Russian gas, while Russia offered only a 14% discount.

Alexander Paraschiy: Last year, Ukraine and Russia spent more than five months in talks before they found common ground on the gas issue in late October. This time, we do not expect any significant changes. It seems a deal will be reached in mid-4Q15, the earliest.

For this year, it’s more important for Ukraine to reach some deal to restart Russian gas imports sooner than when it was reached in 2014. As of Aug. 20, 2014, Ukraine had stored 13.89 bcm of natural gas, or 10% less yoy. If gas imports don’t increase in the coming weeks, Ukraine will enter the heating season with smaller gas stocks than a year before, which would threaten stability of its energy system.