The five-year period of certainty: the negotiations marathon ended with the signing of the gas agreement

Russia and Ukraine signed an agreement on gas transit to Europe. Intense negotiations were almost continuously for several days. Had to finish before the New year.

In the new year with a new contract. Moscow and Kiev still have settled all issues related to the transit of Russian gas. “Gazprom” has signed with the Ukrainian colleagues a set of agreements and contracts.

These agreements, as stressed by the head of the Russian holding Alexei Miller, are a really big batch deal that restored the balance of interests of the parties. Documents acquire legal force since the signing and ensure the supply of Russian raw materials after December 31, 2019.

As noted by Miller, the group has made every effort and once again proved that is a responsible supplier and a reliable partner. Experts talk about why the contract needed to be signed so urgently.

“This is a victory for common sense and for strategic reasons both for Russia and for Ukraine, – said Alexey Grivach, Deputy Director of the national energy security Fund gas problems. – If the transit crisis took place again, even with the mild winter in Europe, Russia and Ukraine, and large stocks, the parties prepared, but it still would have caused catastrophic damage to the reputation of Russia as a supplier and Ukraine as a transit country”.

as for specific documents, “Gazprom” and “Naftogaz” have signed the agreement on the organisation of transportation of gas through territory of Ukraine. As noted in the official statement of the Russian holding, thus “Naftogaz” is the company organising the transit and assumes the corresponding risks. She needs to reserve capacity of the gas transportation system of Ukraine in the total of 225 billion cubic meters of gas for five years. That is, next year it will be about 65 billion cubic meters, and in the futures four years of 40 billion.

in addition, the parties entered into an irrevocable settlement agreement. It provides for the withdrawal of all the arbitration and lawsuits against each other, which is not made final decisions, and waiver of potential claims under contracts of 2009. I note that earlier “Gazprom” has paid “Naftogaz” 2 billion 900 million dollars in accordance with the decision of the Stockholm arbitration. And so in order to avoid such a situation this time and was so meticulous approach to the details of the agreement.

“the Parties are trying to protect themselves from not again to appear before the Stockholm arbitration, and that none of the parties was not supposed to. Therefore, talking about commas, which must agree. We are talking about a complex process of negotiation of the contract, which potentially should not cause any additional disputes, litigation and should not result in additional payments to any of the parties,” — said Valery Wiberg, the Director of analytical Department IK “Region”.

In Kiev already stated — on the transit of Russian gas to Ukraine in total earn about $ 7 billion. The principles of such a calculation is unclear: the details of the agreements are not reported, known only to those parameters that were prescribed in the Protocol dated 20 December.

“it Was stipulated that the transit rate will be at the European level. But what this European standard, what is the pricing formula for transit — is there written was not, — says Igor Yushkov, a leading analyst of the national energy security. — I think the main problem now is agreement in determining rates, because Ukraine is seeing some delays with the commissioning of the “Nord stream – 2″, sees the temptation in order to maximise its position in the framework of this agreement. They can include someadditional factors that was not originally envisaged in the Protocol. In this, I think the main problem there is the pricing of transit.”

In Brussels reached between Gazprom and Naftogaz agreement greeted. In particular, the European Commission Vice President Maros Sefcovic in his Twitter noted that it has enhanced energy security and the whole of Europe receives a significant benefit.

the long-awaited agreement between Russia and Ukraine was more than one year. And all the last days meetings were held at different levels in a non-stop to Berlin, Minsk and Vienna. This trouble was caused by the fact that today is the last day of the current agreement and not pursue the new, at risk would be supplied gas transit to Europe via Ukraine.