Poroshenko: Ukraine is close to regulating the gas conflict with Russia 

Poroshenko and Putin on the phone


2014/10/12 • Political News

Ukraine and Russia have come close to reaching an agreement in the gas issue, stated Ukrainian President Petro Poroshenko on Saturday during his working trip to Kharkiv.

We are now very close to regulating the issue of the gas conflict with the Russian Federation. I hope that significant progress will be demonstrated on October 17, next Friday, in Milan,” Poroshenko said.

According to him, the issue of gas security will be discussed together with the issues pertaining to the Peace Plan and the execution of the Minsk Agreements. “We think that Ukraine’s propositions are clear and grounded. We are convinced we are close to solving this issue,” noted the head of state.

On September 26 at the trilateral gas talks in Berlin, Russia, Ukraine and the EU discussed the ‘winter plan’ regarding the gas issue. It preemptively presumed that should Kyiv pay the 3,1 billion USD debt for Russian gas this year, ‘Gazprom’ will supply 5 billion cubic meters of gas to Ukraine with advance payments of 385 USD per thousand cubic meters.

Meanwhile Ukraine offers its own schedule of debt payments and does not agree with Russia’s proposed mechanism to give a discount of 100 USD per thousand cubic meters on account of taxes.

Ukraine currently only receives reversed gas from Europe. Import from Russia was suspended on June 16.

Earlier the Russian President’s press secretary Dmitry Peskov stated that a meeting between Vladimir Putin and Petro Poroshenko was being discussed, the meeting could take place in Milan at the EU and Asia summit both in the bilateral and multilateral formats.

Translated by: Mariya Shcherbinina
Source: Radio Liberty

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  • Murf

    I am glad Ukraine is not gullible enough to take the discount. It can be yanked at a moments notice and will undermine domestic gas development.
    Russia has proven it can not be trusted as a supplier or a neighbor.
    Winter is coming but Russia is facing a financial winter of it’s own with falling oil prices.
    They will be willing to compromise.
    Best course of action:
    1) Make a deal to get the gas flowing at or about 350 per 1000. It’s a bitter pill but the gas cut off will hurt development and investment.
    2) Keep filling the gas stockpile. this is your insurance that Russia can not “turn off the tap” when ever it chooses or force a renegotiation of the price at an inconvenient moment like say in February. This worked well for the US after the 70s oil embargo.
    3) Reduce the energy tax from 55% to say 35%, that is still up from 25%. The high tax is a small short term gain but a huge long term loss.
    4) Get the coal mines that Ukraine controls back into operation and start building coal gasification plants. There was an effort to build them during Yangko’s time by a US/Ukraine company that was blocked bureaucrats. They were probably being bribed by Russia to prevent competition. If this was viable at 250$ per thousand then it should be very profitable at 350%
    5) Do whatever it takes to get the gas shale fields developed.
    Nationalize the goldmines in the Carpathians and stockpile the production this will help stabilize the Harvina.
    Just a few thoughts.
    Best regards from the US.