Released November 05, 2014 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--It has become a case of "seventh time lucky" for the European Union (E.U.), as its latest diplomatic efforts to stabilise the impact of the ongoing Russia-Ukraine conflict on gas supplies has resulted in a deal.
The European Union, Ukraine and Russia signed a deal worth $4.6 billion in total that will guarantee gas supplies to Ukraine and Europe over the coming winter.
José Manuel Barroso, President of the European Commission at the signing of the winter package, said: "There is now no reason for people in Europe to stay cold this winter. I am delighted that I can announce a major success at the end of my mandate as President of the European Commission. With our strong support, Ukraine and Russia have today found agreement on their outstanding energy debt issues, and on an interim solution that enables supplies to continue this winter. I am glad that political responsibility, the logic of cooperation and simple economic sense have prevailed".
Günther H. Oettinger, Vice-President of the European Commission, said: "This breakthrough will not only make sure that Ukraine will have sufficient heating in the dead of the winter. It is also a contribution to the de-escalation between Russia and Ukraine."
Ukraine's energy problems were made worse in June when Russian state-owned gas giant Gazprom announced that it had cut gas supplies to Ukraine over non-payment of billions of euros in debt. For additional information, see June 20, 2014, article - Russia Halts Ukraine Gas Supplies.
The deal involved two documents: a binding protocol, signed by the European Commission (Vice-President Oettinger), the Russian Federation (Energy Minister Alexander Novak) and Ukraine (Energy Minister Yuri Prodan); and the second, an addendum to the existing gas supply contract, signed by Gazprom of Russia (CEO Alexey Miller) and Naftogaz of Ukraine (CEO Andriy Kobolyev).
The winter package covers the period from now until the end of March 2015 and includes the following main points:
Debts: Ukraine would settle its debts based on a preliminary price of $268.5/1,000 cubic metres by making payments in two tranches: $1.45 billion without delay and $1.65 billion by the end of the year.
New gas: Russia will deliver gas following advanced, monthly payments by Ukraine. The price is below $385/1,000 cubic metres. Ukraine is free to order as much gas as it needs and is not subject to the 'take-or-pay' obligations in the current contract. Ukraine is expected to purchase 4 billion cubic metres until the end of the year 2014 at a cost of $1.5 billion.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
The European Union, Ukraine and Russia signed a deal worth $4.6 billion in total that will guarantee gas supplies to Ukraine and Europe over the coming winter.
José Manuel Barroso, President of the European Commission at the signing of the winter package, said: "There is now no reason for people in Europe to stay cold this winter. I am delighted that I can announce a major success at the end of my mandate as President of the European Commission. With our strong support, Ukraine and Russia have today found agreement on their outstanding energy debt issues, and on an interim solution that enables supplies to continue this winter. I am glad that political responsibility, the logic of cooperation and simple economic sense have prevailed".
Günther H. Oettinger, Vice-President of the European Commission, said: "This breakthrough will not only make sure that Ukraine will have sufficient heating in the dead of the winter. It is also a contribution to the de-escalation between Russia and Ukraine."
Ukraine's energy problems were made worse in June when Russian state-owned gas giant Gazprom announced that it had cut gas supplies to Ukraine over non-payment of billions of euros in debt. For additional information, see June 20, 2014, article - Russia Halts Ukraine Gas Supplies.
The deal involved two documents: a binding protocol, signed by the European Commission (Vice-President Oettinger), the Russian Federation (Energy Minister Alexander Novak) and Ukraine (Energy Minister Yuri Prodan); and the second, an addendum to the existing gas supply contract, signed by Gazprom of Russia (CEO Alexey Miller) and Naftogaz of Ukraine (CEO Andriy Kobolyev).
The winter package covers the period from now until the end of March 2015 and includes the following main points:
Debts: Ukraine would settle its debts based on a preliminary price of $268.5/1,000 cubic metres by making payments in two tranches: $1.45 billion without delay and $1.65 billion by the end of the year.
New gas: Russia will deliver gas following advanced, monthly payments by Ukraine. The price is below $385/1,000 cubic metres. Ukraine is free to order as much gas as it needs and is not subject to the 'take-or-pay' obligations in the current contract. Ukraine is expected to purchase 4 billion cubic metres until the end of the year 2014 at a cost of $1.5 billion.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. To contact an office in your area, visit the Industrial Info "Contact Us" page.
