Novak: Russia ready to extend current contract on gas transit via Ukraine

Novak: Russia ready to extend current contract on gas transit via Ukraine

Russia is ready to extend the current contract on gas transit via the Ukrainian territory or discuss a new one, the country's Energy Minister Alexander Novak said following the trilateral gas talks between Russia, Ukraine and the European Union.

"We are ready to extend the current contract and to consider proposals on entering into a new contract. The position of the Russian Federation is an important relevant issue, we have to solve all controversial matters before starting a new round of relations as those are commercial contracts being implemented first of all by commercial organizations. That is why they should be mutually beneficial, with terms being beneficial both for suppliers and consumers, as well as those providing gas transit services to European consumers," Novak said.

He noted that Russia, Ukraine and the European Union will discuss the volumes of supplies and the rate of transit at a meeting in October.

"We have discussed the issues of volumes to be potentially delivered on a long-term basis to European consumers, we have also discussed the rate of transit (via Ukraine), the calculations presented by the Ukrainian side. Those issues require additional discussions. We have agreed that an expert group of representatives of the European Commission, Russia’s Energy Ministry and Ukraine will be exploring those issues within a few months, and in the autumn, roughly in October, high ranking officials will meet for discussing the current status and the list of matters I just outlined," he said.

Russia, Ukraine and the European Union have also discussed the possibility of implementation of the European legislation with Ukraine after 2020, according to him.

"The discussion also mentioned the current changes in the European legislation as the European legislation is being implemented in the Ukrainian legislation, which also has an impact on future relations after 2020," the minister added.

The trilateral negotiations were calm and constructive, according to Novak.

"In my view, they were quite constructive, business-like and calm. We shared information, opinions about the current situation and prospects of (gas) supplies to European consumers via the Ukrainian territory," he said.

Russia, Ukraine and the European Union have discussed the issue of managing Ukraine’s gas pipeline system at the gas talks in Berlin, Novak said, adding that Moscow is ready to consider Kiev’s relevant proposals.

"The Ukrainian side has dwelled upon the issue. Today Ukraine implemented the European legislation regarding the European Energy community as the relations being established by the Ukrainian side are based on the European legislation. Today the European Commission received proposals as to how it is going to look like from their side. This requires additional exploration. In this case, we are ready to consider the proposals as well. We assume that legislative requirements should be implemented by all sides," he said.

Russia, Ukraine and the European Union have discussed the possibility of an amicable agreement to be made between Gazprom and Naftogaz, Novak said, adding that no decisions have been taken.

"The issue has been touched upon, this being one of the options to settle the relations. No decisions regarding the issue have been made, and I think that all those questions will be discussed in the next round of consultations in October," he stressed.

"I have mentioned the issue regarding suspension of arrests of property until the final decision of the court of appeal," TASS cited Novak as saying.

According to the minster, Russia may increase gas supplies to European consumers by 10-15% in 10 years.

"We see the European consumption rising, we see the volumes of supplies and gas transit particularly via the Ukrainian territory rising. This is connected with the general consumption growth in Europe both in 2017 and already in 2018 as a 6% consumption growth has been reported for the first half (of 2018 -TASS). Moreover, as of today we already realize that the volumes of deliveries to European consumers will be even higher in the next 5-10 years than in 2017-2018, the issue may be about an extra of 10-15%," he said, adding that "those additional volumes were discussed" at the meeting.

According to Novak, the sides have agreed not to unveil specific numbers at this point. "This requires a further discussion and approval. This format of work has been defined, and we will be discussing those figures together with the European Commission in order to get to more specific numbers in October," he explained.

Gazprom Chief Executive Officer Alexei Miller said earlier that gas exports to Europe might set a record of 200 bln cubic meters in 2018, adding that the main factors of demand growth are rising economic activity in European countries and a long-term trend of a decline of European production that has emerged over the past several years. In 2017, Gazprom increased gas exports to Europe by 8.4% to 194.4 bln cubic meters.