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EU Hosts Russia-Ukraine Gas Talks To Secure Winter Supplies

European Union

The European Commission is hosting on Friday a trilateral meeting with Russia and Ukraine in a bid to ease their dispute over natural gas transit and deliveries—the first such talks since Ukraine stopped purchases from Russia last year.

The talks in Brussels are chaired by European Commission Vice-President in charge of the Energy Union, Maros Sefcovic, with Russian and Ukrainian ministers of energy, Alexander Novak and Ihor Nasalyk, respectively, attending. Top officials from Ukrainian company Naftogaz and from Russia’s Gazprom are also present.

“Given the importance of energy relations between the European Union, Russia and Ukraine, continued dialogue is of great importance. I look forward to the trilateral talks, aiming to contribute at ensuring predictable and stable gas deliveries throughout the winter season,” Sefcovic said before the talks.

The EU depends on Russia for around one-third of its gas supplies, most of which transit Ukraine via pipelines. The gas pricing dispute between Ukraine and Russia led to gas supplies from Russia via Ukraine to some EU nations being cut off in freezing winter months in 2006 and in 2009.

Gazprom and Naftogaz are suing each other over the gas pricing contracts in an international arbitration court in Stockholm, with each claiming around US$30 billion. Ukraine insists that some clauses in the long-term contract are against Ukrainian and EU antitrust laws.

Related: Saudi Arabia Cuts Oil Deliveries To U.S.

Gazprom is also under scrutiny by EU regulators over its natural gas pricing policy.

With Russian-Ukrainian relations further soured with Russia’s annexation of Crimea, Ukraine has been buying gas from reverse flow purchases with EU neighbors and has been relying on storage supplies.

“It's enough gas to see us through to the end of winter,” Naftogaz CEO Andriy Kobolyev told reporters in Brussels, as quoted by Reuters.

“Political disputes continue to weigh heavily on negotiations, and Ukraine has demonstrated its willingness to pay a higher price for reverse supplies of gas from its Central and East European neighbors rather than break the impasse and take direct deliveries from Russia,” Emily Stromquist, senior analyst at Eurasia Group, told Bloomberg via e-mail.

By Tsvetana Paraskova for Oilprice.com

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