The European Commission has tabled a proposal for Russia and Ukraine, covering duration, volumes and tariffs of a future gas transit agreement via Ukraine to Europe after 2019, Vice-President for Energy Union Maroš Šefčovič said, following the trilateral talks in Brussels on January 21.

The proposal also covers other important parameters, such as investment and maintenance of the gas system, as well as legal requirements and technical requirements, Šefčovič added.

“Every day we are getting closer to the end of 2019 when the current contract expires,” the Vice President welcomed the participation of Russia’s Energy Minister Alexander Novak, Ukraine’s Foreign Affairs Minister Pavlo Klimkin as well as the CEOs of two companies involved, Russian gas monopoly Gazprom and Ukraine’s Naftogaz.

“We took stock of the progress achieved so far, covering all key areas – the legal framework for a future transit contract, tariffs, the unbundling of the transmission system operator in Ukraine, and the EU’s future gas demands. In addition, the security of gas supply this winter was also discussed,” Šefčovič said, proposing that the next ministerial meeting to be held in May.

Meanwhile, the work will continue at the level of senior experts.

Šefčovič stressed that having the long-term contract after 2019 “is as important for Russia as for the European Union” because the image of gas and the image of Russia as a supplier and Ukraine as a transit country suffered heavily during the gas crisis of 2009 and the still ongoing war between Ukraine and Russia in the former’s eastern Donbass region.

A first ministerial meeting on the topic took place on July 17, 2018, followed by meetings with experts during the second half of 2018.

Bilateral talks

Turning to his bilateral talks with Russia, Šefčovič said he discussed with Novak the issue of synchronization of Baltic States with the electricity grid of continental Europe.

“The Commission remains fully committed to achieve this by 2025 – without any risk to the Baltics, Russia nor Belarus. That’s why we place a strong emphasis on close cooperation among transmission system operators on all sides,” Šefčovič said, adding that one of such meetings is planned for January 25.

Meanwhile, Russia’s Kremlin-controlled news agency TASS quoted Novak as telling reporters after the trilateral talks on January 21 that further detailed the discussion of Russian gas transit via Ukraine after 2019. This is possible only after the settlement of litigation between Gazprom and Naftogaz.

“We certainly believe that we need to settle problems and legal proceedings existing at present in order to discuss specific details of the contract [for Russian gas transit via Ukraine after 2019 – TASS],” Novak said.

Regarding bilateral talks with Ukraine, Šefčovič said the Commission welcomes and supports Ukraine’s commitment to unbundling and plans to discuss the latest proposal from Naftogaz.

“Some work remains to be done. And therefore, the Commission will also organise a meeting with European transmission system operators to use their know-how for the benefit of the process,” Šefčovič said. “If all goes well and if all actors work towards the same goal, I am confident that this process will be successfully completed by the end of this year.”

Nord Stream-2

Regarding the Nord Stream-2 gas pipeline from Russia to Germany that bypassed Ukraine, the Vice President reiterated the European Commission’s concerns with regards to the Energy Union objectives and EU energy diversification goals.

“We insist on full compatibility with European law and I debriefed both delegations about the process of the approval of the Gas Directive Amendment where I underlined that the Commission remains fully committed to the Gas Directive Amendment and, to be frank, we are not very impressed with the Austrian and Bulgarian Presidency on this matter because the work did not progress as we in the Commission had hoped,” Šefčovič said. “Now we have a new proposal on the table proposed by the Romanian Presidency,” he said, adding that the Commission has studied that proposal and it addresses the outstanding points raised by the EU.

“I believe that with this latest proposal, a general approach by early February should be possible and that it would open the door for talks before the European Parliament elections and we should definitely strive for that. Our aim is to have a coherent set of EU energy rules applied to offshore pipelines as it is in the case with onshore pipelines,” Šefčovič said.

He stressed that the Commission sees no obstacles in the implementation of EU rules. However, much depends on the sides’ political will. For his part, Šefčovič stressed that the Gas Directive Amendment would increase the legal certainty of how the European energy and gas law is applied in Europe.