Report: Russia sees risks for prolongation of gas transit via Ukraine

MOSCOW, Apr 21 (PRIME) -- Moscow sees big risks for prolongation of its natural gas transit deal with Ukraine after 2019, Energy Minister Alexander Novak said in an interview to Kommersant FM radio station broadcast late on Wednesday.

“We now have a contract that suspends gas transit operations through Ukraine in late 2019, from January 1, 2020. Russia is ready to hold negotiations on prolongation of the contract, but, you know, we see big risks for prolongation of the contract, as the Ukrainian side announced an increase of the transit cost by more than two times regarding the current cost,” he said.

“By the time the contract expires, the monopoly position of the Ukrainian side from the point of view of having gas transport infrastructure will allow them to raise questions that are absolutely economically unsound, and difficulties may arise once again if we don’t have any relatively alternative infrastructure.”

Previously, Russian gas giant Gazprom repeatedly said that the company is very unlikely to prolong the transit contract with Ukraine after 2019 on unprofitable conditions. In January, Kiev increased transit tariffs for Gazprom by over 50% to U.S. $4.5 for 1,000 cubic meters of gas per 100 kilometers. Energy and Coal Industry Minister Vladimir Demchishin said that Ukraine will bill Gazprom for transit to the E.U. in accordance with old tariffs until a new agreement is signed with the company.

End