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Russia and Ukraine Meet on Natural Gas Pricing Dispute
Russia and Ukraine Meet on Natural Gas Pricing Dispute
(about 7 hours later)
BRUSSELS — Russian and Ukrainian officials met here late Monday to seek a solution to a dispute over energy that has exacerbated tensions and led to concerns about cutoffs of natural gas to the European Union.
BRUSSELS — Russian and Ukrainian officials failed to reach a solution early Tuesday to a dispute over energy that has exacerbated tensions and led to concerns about cutoffs of natural gas to the European Union.
The talks, under the aegis of the European Commission, are intended to push the two sides to reach an agreement on how much Ukraine should pay Russia for gas already consumed and for future consumption.
The talks here, under the aegis of the European Commission, were intended to push the two sides to reach an agreement on how much Ukraine should pay Russia for gas already consumed and for future consumption.
The meeting between Russia’s energy minister, Alexander Novak, and his Ukrainian counterpart, Yuriy Prodan, was the fifth of its kind since talks began in early May after Gazprom, the Russian state-controlled energy giant, raised the price of gas to Ukraine by 80 percent in March and threatened to cut off supplies if it did not pay up.
“We have some open questions and some different positions — ongoing different positions — but we agreed to continue to negotiate,” Günther Oettinger, the European Union’s energy commissioner, said at an early morning news conference.
The price rose after Russia annexed Crimea and imposed an export tariff that had been waived as a form of payment for the lease of the Black Sea fleet there. In response to the re-imposition of the export tariff, Ukraine ceased payments on its natural gas bills, prompting Gazprom to threaten to cut off domestic shipments.
Further talks will be held Tuesday night or Wednesday morning, Mr. Oettinger said.
Ukraine has since paid Russia at least $786 million to cover gas already delivered in February and March.
The meeting between Russia’s energy minister, Alexander Novak, and his Ukrainian counterpart, Yuri Prodan, was the fifth since talks began in early May after Gazprom, the Russian state-controlled energy giant, raised the price of gas to Ukraine by 80 percent in March and threatened to cut off supplies if it did not pay up.
But Ukraine and the Ukrainian gas utility, Naftogaz, still need to work out a repayment program for some gas delivered late last year, and to work out a new price from April onward. The sums for the outstanding months still could rise to around $2 billion, although that would be based on the price the two sides decide on and the amount of gas that has already been delivered.
The price had risen after Russia annexed Crimea and imposed an export tariff that had been waived as a form of payment for the lease of the Black Sea fleet there. In response to the re-imposition of the export tariff, Ukraine ceased all payments on its natural gas bills, prompting Gazprom to threaten to cut off all domestic shipments.
Alexei Miller, the Gazprom chief executive, and Andriy Kobolev, the Naftogaz Ukrainy chief executive, attended the talks on Monday evening.
Ukraine has since paid Russia at least $786 million to cover gas delivered in February and March.
During negotiations a week ago, the Russian side indicated that it might lower its asking price to $385 per 1,000 cubic meters from $485, putting it on a par with price levels in Europe. That offer came amid an easing of tensions between Russia and Ukraine in diplomatic and military matters and was the clearest indication yet that Moscow’s economic pressure, at least in the short term, would let up as well.
But Ukraine and the Ukrainian gas utility, Naftogaz, still must work out a repayment program for some gas delivered late last year, and to work out a new price from April onward.
The gas dispute is an important matter for Europe, which has experienced energy shortfalls at least twice in the past decade as a result of previous disagreements between Ukraine and Russia. The union relies on Russia for about a third of its natural gas, and a significant proportion of that energy is delivered through pipelines that run into Europe through Ukraine.
The gas dispute is an important matter for Europe, which has experienced energy shortfalls at least twice in the past decade as a result of disagreements between Ukraine and Russia. The European Union relies on Russia for about a third of its natural gas, and a significant proportion of that energy is delivered through pipelines that through Ukraine.
Some members of the European Union, including the three Baltic states and Bulgaria, still rely on Russia for 100 percent of their gas needs, making those countries a particular concern for leaders in Brussels and Washington at a time when Russia is flexing its economic and military muscle in Ukraine.
Speaking here last week, President Obama pledged to help the union combat attempts by Russia to use its energy resources as a weapon and “to help countries in Central and Eastern Europe strengthen their energy security as well,” but he did not give details.
The pricing dispute is far from the only energy issue that concerns officials in Brussels and Moscow.
European Union authorities are taking an increasingly hostile stance toward plans by Gazprom to send Russian gas through a new pipeline called South Stream that would run from Russia under the Black Sea, avoiding Ukraine.
Some Europeans complain that the project would be just another way of making the bloc more dependent on Russian energy. European authorities have shown far greater enthusiasm for plans to deliver gas along a route from Azerbaijan in the Caspian region through countries including Turkey, Albania, Greece and Italy.
Last week, the commission told one of its own member states, Bulgaria, to cease construction on its portion of the South Stream because of concerns about the way the bidding process had been conducted.
Bulgarian authorities said over the weekend that they had suspended construction, and news reports on Monday indicated that Serbia, which is seeking to become a member of the union, also would halt work on South Stream.
Serbia’s energy minister and deputy prime minister, Zorana Mihajlovic, said Serbia would suspend the start of construction because of Bulgaria’s decision, Interfax, the Russian news agency, reported. Being farther along the planned pipeline route, Serbia’s section would of course be useless without the Bulgarian leg.
A spokeswoman for the European Commission, Sabine Berger, declined to comment on the Serbian reports. But she welcomed the decision by Bulgaria, describing it as “an important step in response to the concerns raised by the commission last week.”
The commission was seeking “a discussion on South Stream at the upcoming European Council so that a common E.U. approach can be taken,” Ms. Berger said, referring to a planned summit meeting of European leaders on June 26-27 in Brussels.
