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Wednesday, December 7, 2016

Russia refuses to negotiate with Ukraine on “winter package”


The European Commissioner for energy ready to come to Moscow to convince Russia to sign with Kiev next “winter package” gas. He was concerned that, without Russian gas Ukraine in the winter risks to disrupt gas transit to the EU. However, most likely, the negotiations will end with nothing, since the circumstances and Russia’s position has changed.

Vice-President of the European Commission for energy Union maroš Šefčovič ready to come to Moscow to discuss with Russian Minister of energy, the possibility of trilateral negotiations of Ukraine, Russia and the EU on gas supplies.

“Ukraine really risking transit, if it is to continue to refuse to buy cheaper Russian gas,”

According to him, he had appealed to the Russian side on this issue, date and program of the visit are still being discussed. “For my part I am ready to provide all the necessary mediation and to provide its services to ensure that we could adequately ensure the supply of gas for Ukrainian citizens and to ensure the transit of gas to the EU”, – said Sefcovic during his visit in Kiev.

“Three (actually two – approx. VIEW previous winter confirmed the usefulness of the tripartite Protocol, which identified all sensitive issues have been identified as guarantees in the financial question and warranties that relate to the supply. Therefore, we hope that it can be done again to sign such a Protocol, and I, for my part, is ready to work in this direction”, – said Sefcovic.

Prime Minister of Ukraine Volodymyr Groisman also expressed their willingness for the third time to sign a “winter package” of gas supplies in the Russia – Ukraine – EU. According to him, for the purchase of Russian gas will be used line of credit from the world Bank (WB), which promised to provide $ 500 million.

Thus, Sefcovic will try to convince Moscow of the need for a tripartite form of communication. However, he is unlikely to succeed. The negotiations will likely end in nothing.

“He just needs to show that he is in the working process, how important he is diluting. But Alexander Novak (Minister of energy of the Russian Federation) was announced. And I highly doubt we will change this position. It will be General talks, Sefcovic asked Novak will refuse”, – said the General Director of the national energy security Fund (NESF) Konstantin Simonov.

Russia’s position on the so-called winter package really different from that which our country had been the previous two years. “Then the main goal was to show that Russia remains a reliable supplier and willing to listen to any request of the Europeans, including requests to talk to the Ukrainians because of fears of the EU about the failure of the heating season. In 2014 was not just signed a “winter package” before the summer we supplied gas to Ukraine without payment, and the debts to Naftogaz still has not paid. “Winter package” we were perceived as a form of force majeure, given the political situation in 2014-2015,” recalls Konstantin Simonov.

However, not long ago the head of the energy Ministry of Russia Alexander Novak said that the price of Russian gas for Ukraine in the third quarter is competitive and does not require any rebates. So all you have to do to Naftogaz for gas in the winter, is to apply and transfer funds in advance, and in accordance with their volumes Gazprom will supply fuel.

“Russia believes that there is no “winter package” is not needed. We have a contract with Ukraine by which we can live. The more fundamental the current situation differs from the previous lies in the fact that the Minister of energy of Ukraine recognizes that the Russian gas is cheaper than reverse. However, do not agree with the head of Naftogaz, but this is the circus of the Ukrainian authorities”, – says Konstantin Simonov.

Literally 24 August 2016, the head of Ministry of Ukraine Igor Nasalik in the air of the Ukrainian TV channel said that the European thousand cubic meters of reverse gas costs in Kiev for $ 45 more expensive than the possible supply of fuel from Russia. So, according to the Ukrainian Minister of energy, the reverse gas from EU Ukraine buys for 185 dollars per thousand cubic meters, while “under a direct contract with Russia, the price would be $ 140”.

“It’s hard to imagine that the former Ministers of energy of Ukraine said this. Statement Natalika plays into the hands of Russia. Before the meaning of the tripartite gas negotiations was to find a special, lower price for the winter and fix it. But now the price of the contract is below the reverse, so what to fix?” – said Simonov.

In late July, Gazprom called the gas price for Ukraine in the third quarter, which leaves the formula in the contract is $ 167 per thousand cubic meters. And it’s still cheaper reverse gas, which Ukraine prefer to buy in Europe. Thus there is no risk of increased cost of Russian gas for Ukraine in the fourth quarter this year or first quarter of 2017. Because oil prices remain low and only briefly went in the summer to around $ 50 – and it is to them and bound the cost of gas.

As Ukraine makes Russian gas evropeyskimi way, the price issue on the agenda of tripartite talks is not worth it. In the “winter package”, in addition to the fixed price, Gazprom temporarily removed for Naftogaz spelled out in the contract the point of take or pay (“take or pay”), but this is a weak reason to gather in Brussels in a trilateral format. Moreover, Russia is well aware that hardly ever will get from Ukraine payment of fines for systematic violation of this contract terms. However, it is a good lever for judicial pressure on the Naftogaz violating contractual obligations.

Finally, Russia has another reason not to make concessions to Kiev. “What’s more profitable for us – a quiet passing of the winter season, or failures of supply of the Ukrainian side? In light of the fact that the project “Northern stream – 2″ began to acquire the silliest stories that Poland, with Biden, for us it would be good if Ukraine has shown that it is a problematic transit country. We are interested in Ukraine disrupted the transit of gas to Europe” – said Simonov.

And Ukraine really risking transit, if it is to continue to refuse to buy cheaper Russian gas. Thus with her own hands will line the red carpet project “Nord stream – 2”. And all this political hysteria around the pipe will look even less convincing either come to naught.

Will there be a gas crisis this winter, will depend on Ukraine itself – how much it will be able to buy and to pump gas into underground storage facilities up to 15 October – 1 November. It is also important in the winter season. Two previous winters Ukraine is very lucky, because the winter was extremely warm.

According to Novak, the risks to transit of Russian gas to Europe this winter would be eliminated if Ukraine bought from Gazprom at least two to three billion cubic meters of gas for injection into underground storage. Otherwise, if the cold comes early, and the Ukrainian side will not be able to comply fully with the injection of gas, Russia will have to limit Ukrainian consumers, to ensure gas transit to Europe.

“As for the transit of gas during the autumn-winter period, here we see that the Ukrainian side is behind schedule the injection of gas into underground gas storage facilities of approximately 2 billion cubic meters of gas. At the end of August in underground storage facilities, according to official statistics, was pumped 12.8 billion cubic meters. Before the heating season, as you know, regulatory, you need at least 17 billion cubic meters,” Novak said in an interview with TV channel “Russia 24”.

It is this level of injection, by the way, Šefčovič called acceptable. The story of the volumes is indicative: a few days ago Naftogaz of Ukraine said that uploaded by the beginning of the heating season, only 14.5 billion cubic meters of gas in underground storage facilities, and not once was the name of this figure. But energy Minister of Ukraine unexpectedly put the company’s common task, albeit with great delay – to bring the level to 17 billion cubic meters.

Theoretically, says Simonov, Ukraine can manage to increase the volume in its underground gas storage up to 17 billion cubic meters through a single reverse. That is a month and a half (max two months) need to buy and upload of 4.2 billion cubic meters of gas.

Kiev will be purchasing a reverse or Russian gas directly to Gazprom is not so important. Because the reverse is the same Russian gas, only with the margin, which is the European intermediaries. Europeans can even increase the application of Russian gas to resell it to Ukraine. Another thing is that Ukraine is going to cost significantly more, but that’s her problem.

The main question for Ukraine now – where to get the money. “Kiev the money to upload do not want to. Their task is even money to beat. European comrades have to throw,” – said Simonov. But $ 500 million might give the world Bank, enough to purchase only 2.7 billion cubic meters of reverse gas. Kiev needs to find the money to buy another 1.5 billion cubic meters.

source

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