Energy

EU-Ukraine-Russia talks agree on $4.6 billion to secure gas supplies

EU-Ukraine-Russia talks agree on $4.6 billion to secure gas supplies

30 October 2014

After seven rounds of negotiations between Russia and Ukraine, a $4.6 billion ‘winter package’ securing gas supplies for Ukraine and the EU was agreed.

The talks, moderated by European Commission Vice-President Günther Oettinger, resulted in a deal that covers gas supplies from now until the end of March 2015.

Under the terms of the deal, Ukraine must settle its debts based on a preliminary price of $268.5/1,000m3 of gas and payments must be made in two stages: $1.45 billion without delay, and $1.65 billion by the end of 2014.

This adds in total up to $3.1 billion in debt payments, with the final sum of debt to be determined by the Arbitration Institute of the Stockholm Chamber of Commerce between Gazprom and Naftogaz.

Meanwhile, Russia agreed to deliver gas following advance monthly payments from Ukraine. The deal states that Ukraine is free to order as much gas as it needs and is not subject to any take-or-pay obligations.

Ukraine has said it will purchase four billion cubic meters of gas by the end of 2014, worth some $1.5 billion.

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