Russia's and Ukraine's energy ministers have settled on $385 per 1,000 cubic meters as the price for Russian gas supplies to Ukraine this winter, and agreed a gas debt repayment scheme for Ukraine, EU energy commissioner Guenther Oettinger said late Tuesday.
But the deal is not complete as the EU and Ukraine still have to explore the financing needed to make it happen, Oettinger told reporters after moderating talks between Russian energy minister Alexander Novak and Ukrainian energy minister Yuriy Prodan in Brussels.
The ministers and national gas company CEOs involved also have to discuss the arrangements with their respective governments and directors, Oettinger said.
Another round of talks is foreseen for October 29 in Brussels, where the EC is aiming for final binding agreements between the two governments and between the two gas companies, he said.
The exact volume of Russian gas to be delivered to Ukraine between now and the end of March has also not been agreed yet, Oettinger said.
Ukraine earlier this month estimated it was facing a 5 billion cubic meter shortfall this winter.
Oettinger said Ukraine and Russia were considering deliveries of 4 Bcm, depending on the financial resources of Ukraine's state-owned gas company Naftogaz, which was linked to support from international donors, including the EU. Naftogaz will have to pay for the gas in advance.
"Payment for these 4 billion cubic meters can not yet be guaranteed. The volume of gas that can be ordered and paid for this winter will be resolved within the next five working days," Oettinger said.
Ukraine on Tuesday asked the EU for an extra loan of Eur2 billion to help it manage its budgets.
Oettinger said that the EU would be making more funds available to support Ukraine's budget generally, and that Ukraine could use money provided by the EU to pay its gas bills.
The EU would not directly guarantee Ukraine's gas payments to Russia, however, he said.
Oettinger said all parties have agreed that any gas this winter would be delivered free of take-or-pay obligations, in a departure from Ukraine's current gas supply contract with Russia.
Ukraine has also committed to have Naftogaz start repaying its gas debt to Russia, estimated by state-owned Russian gas company Gazprom at $5 billion, and disputed by Ukraine in a complaint lodged with Stockholm's arbitration court.
Naftogaz would pay $1.45 billion by the end of October and another $1.65 billion by the end of the year, making $3.1 billion in total, based on a price of $268.5/1,000 cu m, Oettinger said.
This is the price Ukraine was paying in the first quarter of this year, before Gazprom canceled price discounts with the Russian government's agreement and the price rose to $485/1,000 cu m from April 1.
The agreed interim $385 price, equivalent to around Eur26.81/MWh, is similar to the average spot gas price in Western Europe over the past couple of years.
Oettinger said Russia had guaranteed that this interim price could not be changed by governmental decisions or by changing customs duties between now and the end of March.
Russia has also committed to paying transit fees to Ukraine, Oettinger said.
Russia supplies about 15% of the EU's gas through Ukraine, around half of its total gas exports to the EU.
