Ukraine and Russia failed to reach an agreement on natural gas deliveries during overnight negotiations hosted by the European Union as Gazprom insisted on receiving a debt payment before a deadline today.
Talks may resume today (Tuesday) or tomorrow morning, EU Energy Commissioner Guenther Oettinger told reporters in Brussels after the meeting, which lasted more than seven hours. The EU, reliant on Russian gas piped through Ukraine for about 15%, is trying to broker a deal to avert a cutoff.
Gazprom will not delay today’s deadline, under which Ukraine must make prepayments for gas supplies, spokesman Sergei Kupriyanov said.
“All parties are engaged to avoid any wrong development,” Oettinger said.
“We have some open questions and some different positions, but we agreed to continue negotiations.”
Gazprom, the Russian state gas exporter, and Naftogaz Ukrainy, its Ukrainian counterpart, remain at loggerheads over debt for past supplies and future prices.
Following a recent payment, Ukraine owes $4.5billion for gas supplies, according to Gazprom. Kiev disputes the size of its debt.
Gazprom rescinded a discount granted in December because of Ukraine’s mounting debts. Russia then stripped the country of an export-duty break given in 2010 in exchange for a lease on its Black Sea fleet’s port in Crimea, the peninsula Russian President Vladimir Putin annexed in March.
This boosted prices by 81% to $485 per thousand cubic meters, although Ukraine has refused to pay, calling for a return of the first-quarter price.
The European Commission, the regulatory arm for the 28 EU nations, proposed a package at the June 2 round of trilateral negotiations to settle the debt and define future prices for the next 12 months.
The parties did not move forward today, with Russia changing its position on the pricing mechanism and proposing a reduction of export duties, Ukrainian Energy Minister Yuri Prodan told reporters after the talks.
“According to this proposal, the price reduction should be based on a regulation of the Russian government,” he said.
“However, this decision can be withdrawn in time. Of course the Ukrainian side doesn’t accept this pricing mechanism.
“We want to reach an agreement on a fair market-based price.”
Ukraine transferred $786 million last week to Gazprom’s account for February and March supplies. Ukraine still has not paid for 9.8billion cubic meters of gas supplied in 2013 and this year, Kupriyanov said June 3.
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