News / Europe

Moscow to Meet Ukraine for Energy Talks as EU Frees Gas for Kyiv

Pipelines are seen at a gas border delivery station of pipeline operator Eustream in the eastern Slovak town of Velke Kapusany, near the border with Ukraine, April 15, 2014.
Pipelines are seen at a gas border delivery station of pipeline operator Eustream in the eastern Slovak town of Velke Kapusany, near the border with Ukraine, April 15, 2014.
European and Russian officials will meet this week and next for emergency talks to try to prevent Moscow cutting off gas supply to Ukraine, as Europe explores how to pump more gas to the struggling country. Moscow has nearly doubled the natural gas price it charges Ukraine and threatened to cut gas supplies for non-payment of debt since a new pro-Western government took over in Kiev in February.

It also has annexed Ukraine's Crimea region and voiced support for pro-Russian separatists who have seized control of government buildings and set up road blocks in parts of eastern Ukraine.

The talks next week are another attempt to bring Ukraine and Russia to the negotiating table as a previous agreement struck in Geneva last week to de-escalate tensions between the two neighbors fractured.

The preparations for negotiations follow calls from Ukraine's acting president, Oleksander Turchinov, for government forces to relaunch an offensive against pro-Russian rebels.

In the first round of talks on Thursday, the European Union's top energy official, Guenther Oettinger, will meet Ukrainian and Slovakian ministers in Bratislava to seek a deal on shipping gas to Ukraine via Slovakia.

Russia will not attend that meeting. It said it would host talks in Moscow on Monday, however, bringing together Ukraine Energy Minister Yuri Prodan, Oettinger and Russian Energy Minister Alexander Novak to discuss gas pricing for Kyiv.

"We sent a letter to Oettinger proposing to hold the talks in Moscow on April 28," a spokesperson for the Russian Energy Ministry told Reuters.

The European Commission, the EU executive, has not confirmed where or when any meeting with Russia would take place, though it has said it is willing to take part in such talks.

"Today, EU Energy Commissioner Oettinger has invited the Russian Energy Ministers Novak and the Ukrainian Energy Minister Prodan for a first meeting for trilateral consultations, but the date and place are not fixed yet," a Commission spokeswoman said. She confirmed Thursday's talks in Bratislava, which follow months of preparation to reverse the flow of gas through Slovakia to help Ukraine in the event of a halt in supplies.

"The Commission is confident that the Memorandum of Understanding on reverse flows can be signed as soon as possible between the two pipeline operators in Slovakia [Eustream] and in the Ukraine [Uktransgas]," said the spokeswoman.

Turn off taps

Russia's seizure of Crimea has caused the most serious East-West rift since the end of the Cold War. The European Union and United States have imposed sanctions, mostly in the form of visa bans and asset freezes on a number of Russian officials.

At the same time, Russia has warned that gas supplies to Ukraine could be cut, and that could in turn lead to a reduction of onward deliveries to Europe.

Russia provides Europe with roughly one third of its gas imports, over half of which flowed via Ukraine last year, and delivers around half of Ukraine's domestic gas needs.

Moscow, which does not recognize the Ukrainian government that replaced ousted President Viktor Yanukovych in February, nearly doubled the gas price for Ukraine to $485 per 1,000 cubic meters, starting from April. Kiev, which is in deep financial trouble, is refusing to pay.

Russian state-controlled gas producer Gazprom said Kyiv owes it $2.2 billion for gas already delivered, and said it is considering demanding up-front payments, increasing the risk of Russia turning off the taps.

Prodan said on Wednesday that Kyiv had sent Moscow its gas price suggestions, but that there had been no response yet. He would not specify the suggested price. Ukraine's officials have previously said they were ready to pay $386 per 1,000 cubic meters.

The EU has been working on developing technology to ship gas back to Ukraine in the opposite direction to that for which the pipelines were designed. The most significant such channel would be through Slovakia, but talks had repeatedly failed to get a deal.

Slovak government officials said Thursday's outline agreement was expected to cover smaller flows than Ukraine wanted as Slovakia sought legal advice on a bigger project. Russia has said reversing flows of its gas would be illegal.

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