Ukraine, EU worked out joint position for today’s gas talks with Russia

Ukraine’s prime minister, energy minister and Naftogaz CEO agreed with the EU side, headed by the EU energy commissioner, upon a common position on talks with Russia, Naftogaz reported in an Oct. 20 press release. They called for “an obligatory signing of binding documents between Naftogaz and Gazprom” that “should exclude the possibility of any of the parties to unilaterally change the conditions”, the press release stated. An agreement should contain “clear cut guarantees for the supply of agreed upon natural gas volumes from Gazprom on the one hand, and a guarantee of payments for the supplied gas by Naftogaz, on the other.” A new round of trilateral gas talks are scheduled to take place today in Brussels.

Alexander Parschiy: This proposal is exactly what the Russian government has been trying to avoid – fixing the gas price for Ukraine at a certain level (USD 385/tcm till the end of March) without any possibility to unilaterally change it.

Recall, the Russian side is insisting on its own pricing approach, which is that gas for Ukraine should cost USD 485/tcm, less the USD 100/tcm discount granted by the Russian government. This is at least one, and for sure the most critical, difference between the Ukrainian and Russian sides leading into today’s negotiations. As before, we remain skeptical about a fast solution to the outstanding issues in this conflict.