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News // Transportation and storage

Russia ready to extend gas transit deal with Ukraine by 10 years

01 February 2019 , 18:00Neftegaz.RU648

Moscow, February 1 - Neftegaz.RU. Russia is ready to extend its current contract on gas transit through Ukraine, which expires on Dec. 31, 2019, for another 10 years, said Russia's Permanent Representative to the European Union Vladimir Chizhov.


«This contract is fairly balanced, so the Russian side represented by Gazprom, as an economic entity, is ready to extend the document,» TASS quoted Vladimir Chizhov as saying. Chizhov believes that the fate of a new contract will depend on the winner of the upcoming presidential elections in Ukraine on March 31.


On Jan. 21, the 2nd round of trilateral talks with the participation of Russia, Ukraine and the European Commission on transit of Russian gas through the territory of Ukraine was held. At the meeting, the EC made a proposal on the duration of the future transit agreement, volumes and tariffs of gas shipments, as well as investment and maintenance of the gas system, according to a statement by VP of the commission for Energy Union Maros Sefcovic.


The participants agreed to convene the next trilateral meeting in May. Russia is building 2 new pipelines to supply gas to Europe - Nord Stream-2 and TurkStream bypassing Ukraine.

Ukraine stands to lose about $3 billion of transit fees if a deal cannot be struck, which amounts to 3 % of Ukrainian GDP, according to Yuriy Vitrenko, chief commercial officer at Ukraine's Naftogaz.


Following the Jan. 21 talks, Russian Energy Minister Alexander Novak told the basic condition for the extension of the contract is its commercial potential, that is creating economic conditions that will be competitive compared to other routes like the Nord Stream and TurkStream.


Further detailed discussion of the Russian gas transit via Ukraine after 2019 is possible only after settlement of a litigation between Russia's Gazprom and Naftogaz, Novak said. Naftogaz claims billions of dollars from Gazprom for under-deliveries of gas in previous years.

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