UPDATE 2: Novak, Sefcovic agree on Russia–Ukraine–EU gas talks

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KIEV, Nov 25 (PRIME) -- Russian Energy Minister Alexander Novak and European Commission’s Vice President for Energy Union Maros Sefcovic have agreed to hold trilateral talks with Ukraine on natural gas disputes, Novak told reporters on Friday following his meeting with Sefcovic.

“We have discussed implementation of the existing contract (with Ukraine) and agreed with mister Sefcovic that we will separately meet in a trilateral format together with representatives of the Ukrainian side and mister Sefcovic in order to discuss additional supplies of gas in the framework of existing contracts,” he said.

Russia may sell 1.5–4 billion cubic meters of gas to Ukraine this winter. “We are discussing the possibility of supplying 1.5–4 billion cubic meters of gas. I would like to stress that these supplies will be carried out in full compliance with the existing contract,” he said.

He added that Russia will export gas to Ukraine only on condition of prepayment.

Kiev’s price for Russian gas in October–December is about U.S. $15–30 below prices at European spot floors, according to the current contract pricing formula, he said.

Sefcovic said that he had offered to hold the trilateral consultation in Brussels in the next few days and that the commission is finalizing its work with the World Bank for provision of a U.S. $500 loan to Ukraine to buy Russian gas. There is a chance to raise financing from the European Bank for Reconstruction and Development, and Ukraine and Naftogaz Ukrainy also have their own financial resources, he said.

Novak said that the trilateral meeting will most likely be held in December. But possible restoration of gas exports to Ukraine in winter will be made only under the take-or-pay conditions.

The two officials also discussed reliability of gas transit to the E.U. through Ukraine this winter. Besides they discussed the Nord Stream-2 and Turkish Stream projects, and Russia is ready to submit additional information on economic viability of the projects to the E.U., he said.

Naftogaz Ukrainy said in a statement that it is ready to restart purchases of Russian gas on conditions of two previous winter packages. The company still sees the price of Russian gas giant Gazprom as non-competitive and continues to buy gas from the E.U., but is ready to discuss acceptable conditions.

Under the previous winter package, Naftogaz Ukrainy bought 2 billion cubic meters of gas from Gazprom for $500 million it borrowed with the help of the European Commission. Ukraine stopped purchasing Russian gas on November 25, 2015.

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