New talks on Ukraine, Russia gas dispute scheduled for Oct. 21

EU Energy Commissioner Gunther Oettinger has offered the Ukrainian and Russian sides to schedule the next trilateral meeting for Oct. 21 to try resolving natural gas issues, the Interfax news agency reported on Oct. 9. Later the same day, Ukrainian Energy Minister Yuriy Prodan told journalists that the Ukrainian side is comfortable with the offered date.

Recall, Russia, Ukraine and the EU are trying to put on paper the results of verbal agreements that were reached at the last trilateral meetingon Sept. 26. Ukraine and Russia have sent each other their visions of how they see the future deal and agreed to send their commentsto the counterparty’s proposal to the EU Commission by Oct. 7. The EU Commission agreed to consolidate all the adoptable proposals into a draft document, which would be discussed at a new meeting.

Ukrainian state gas monopoly Naftogaz stated in its Oct. 9 press release that Ukrainian side sent on Oct. 7 its comments regarding its vision of the interim gas deal. It also shed some light on the offers from the Russian side: “Naftogaz is surprised … by the proposal that Gazprom should not be a signatory to the binding deal,” the company commented in its release.

In another release, Naftogaz reported that the government brought the regulation of natural gas transit though Ukraine in line with the requirements of EU’s third energy package. The regulation sets a new pricing approach for gas transit and will be valid as of Nov. 1, 2014. According to Naftogaz, a gas transit deal between Ukraine and Russia should be amended to comply with new regulation. The company believes this will strengthen negotiating power of Ukraine at the upcoming gas talks.

Alexander Paraschiy: The events of the last day show that neither Russia nor Ukraine are ready for compromise in the gas talks. Note that two weeks have been passed since their last meeting, and they have yet to agree on what they “agreed to” there. Ukraine wants to add the gas transit issue to the talks on the conditions of Russian gas supply to Ukraine, which makes the negotiation process more complicated. Instead, the Russian side is trying avoid signing any written document, as hinted by Naftogaz. All this supports our pessimistic view on a compromise being reached in the upcoming talks, if they take place at all.