The ‘Winter Packet’ approved in Brussels will provide Ukraine with gas

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2014/10/31 • Economy

Article by: Vitaly Yeremitsa

Brussels – The agreement regarding the renewal of gas supplies to Ukraine has been reached. After many hours of talking deep into the night, several flights between Moscow and Brussels, telephone consultations at the highest level, Ukrainian, Russian and European participants of the gas meetings finally reached an agreement in the gas conflict. Late on the evening of Thursday the sides signed documents which would guarantee Russian gas supplies to Ukraine throughout the heating season.

The sides officially signed the binding trilateral EU-Ukraine-Russia protocol on camera before the international press. Signatures were also added to appendices to the Gazprom-Naftogaz contract at the EU Commissions.

EU Commissioner for Energy Policies Günther Oettinger called the results of the gas meetings “a breakthrough and a positive moment for Europeans and for Ukraine.” When explaining the details of the agreements, he noted that Russia will give Ukraine a 100 USD discount on gas and throughout the winter period, the country will receive gas at fixed market prices.

Ukraine will also receive assistance from the IMF and the EU, with the help of which it will be able to pay all of its gas bills. “Thanks to this, the Ukrainian side received the opportunity to order the amount of gas it needs,” Oettinger added, expressing his conviction that Russian gas transit through Ukraine are ensured and all the debts are paid.

According to the EU commissioner, before the end of the year Russia will receive 3,1 billion USD to cover the gas debts from Ukraine.

According to him, the trilateral agreement may serve as an example of practically improving relations between Ukraine and Russia.

Barroso: no more reason to freeze in winter

“The end of my tenure as head of the EU Commission could not have happened better, as it has with the signing of these gas agreements,” said head of the EU Commission Jose Manuel Barroso. “I hope that the current agreements will add to the trust between Ukraine and Russia, and all the current obligations, both of the supplier and the transit provider, will be met… Therefore there is no reason to freeze in winter.”

“The difficult autumn-winter period this year will follow the normal regime,” stated Ukrainian Energy Minister Yury Prodan in Brussels. He says that now, “having approved interim decisions, Ukraine and the EU Commission will be able to ensure necessary financing to buy gas volumes which will ensure Ukraine’s energy security and security of transit to EU countries.”

However, the final decision and regulation will be done in court, adds the Ukrainian official.

Minister Prodan noted that the so-called ‘Winter Packet,’ so the period between November 1, 2014 and March 31, 2015, the prices on gas are fixed. Until the end of the year the price will constitute 378 USD per thousand cubic meters, and in the first quarter of 2015 – 365 USD.

“We signed a trilateral protocol, and I hope that the EU Commission’s signature will guarantee that this protocol is executed,” Minister for Energy Prodan concluded.

New gas will come after advance payments and the first tranche to cover the debt

Russian Minister for Energy Alexandr Novak, when explaining the details of Ukraine’s debt payments and purchasing new gas volumes, explained that the aforementioned 3,1 billion USD by the end of the year have to be transferred by Kyiv to Gazprom in two tranches: the first is to come in the nearest days. The second, by the end of the year. “The condition for new Russian gas supplies are agreements regarding advance payments and the first tranche for debt,” noted the Russian Minister.

Therefore, the base conditions to renew gas supplies to Ukraine throughout the winter have been reached.

However, we should not forget that it is difficult to surely predict anything with such an unpredictable partner like Russia. Plus, they only spoke of the so-called ‘Winter Package,’ therefore it is possible that they would have to make separate agreements regarding further, summer gas supplies.

Translated by: Mariya Shcherbinina
Source: Radio Liberty

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  • Brent

    Wow, a signed agreement with Russia!!! All we need now is American and British guarantees of the signed agreement….and a promise by Russia to respect Ukraine’s territorial integrity…

  • George

    A signed agreement, a guarantee from Russia, even the Ruble’s not worth the paper it’s printed on.

  • rgb

    Realizing the possibility of the increase in ruble on the market, I’m hoping payment to Moscovy will be in rubles.

  • Murf

    Excellent news.
    Although paying any thing to Russia may seem like giving aid and comfort to the enemy (It should because it is.) Paying the back debt is necessary. With this the new administration is showing that ,unlike it’s predecessors, they are a responsible partner.
    A compromise is something that everybody hates but they can all live with.
    This definitely qualifies.
    But it is an important step towards Ukraine walking away from it’s dysfunctional Post Soviet past.
    Just keep developing the country’s energy resources so you can say screw you! to Putin next winter..