Fourth round of Ukraine-Russia gas talks brings little progress

The energy ministers of Ukraine, Russia and the EU gathered for their fourth meeting to discuss Russian gas prices and payment schedule for Ukraine in Brussels on June 2. As before, the core result of the meeting was a decision to meet again in the near future, possibly this week. According to Gazprom CEO Alexey Miller, the Russian and Ukrainian sides decided not to sue each other until June 9, which seems to be a new deadline for finding a compromise.

 

According to EU Energy Commissioner Günther Oettinger, Ukraine and Russia agreed at the meeting to consider a “package deal” that will determine both the price and payment schedule. He also expressed his hope that this deal will cover the period until June next year, reported the Reuters news agency. He expected that a new round of negotiations will convene this week “to try reach an agreement by the middle of next week”, reported the Interfax news agency. If an agreement is not reached in the near future, Naftogaz will apply to the Stockholm Arbitration Court, the Ukrainian company’s press service reported on June 2.

 

Russian Energy Minister Alexander Novak was a bit more optimistic. “We heard the readiness to pay for supplies (of gas to Ukraine) in November and December and a USD 500 mln payment as part of (supplies in) April-May by June 9”, Novak said in an interview with the Russia-24 television network, as cited by Interfax. At the same time, Miller assumed that some other agreement might be reached that will allow Ukraine to postpone the payment.

 

Alexander Paraschiy: To us, the most encouraging news from the fourth meeting was that neither side declared new conditions to solve the gas dispute, unlike the previous two talks. That allows us to believe that the parties will eventually concentrate on discussing the price for Russian gas at the nearest meeting. At the same time, we do not rule out that this discussion will last a long time.

 

Thus far, the starting position on prices from Ukraine (which is demanding USD 269/tcm) and Russia (which is offering USD 486/tcm) are too far from each other. Notably, while Oettinger assumed on May 15 that the price should be between 350 and 380 USD/tcm, on June 2 he offered the widest range of 269 to 486, which indicates the price talks could become rather heated.

Источник: Конкорд Капитал