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Mar 2, 2015 5:45 PM

Russia, Ukraine reach gas deal to avoid cuts this month

The Associated Press

BRUSSELS (AP) Russia and Ukraine reached an agreement late Monday to ensure natural gas supplies to war-torn Ukraine for the month of March, averting possible cuts that could have hit supplies to the European Union.

The two countries have fought several gas price wars in past years and Moscow had been threatening to turn off the taps to Ukraine on Tuesday unless it received outstanding pre-payments, as agreed in a deal they clinched last October, the so-called winter package.

"I am satisfied that we managed to safeguard the full application of the winter package for the supply needs in Ukraine," said EU energy chief Maros Sefcovic after mediating emergency talks between Russian Energy Minister Alexander Novak and his Ukrainian counterpart Volodymyr Demchyshyn.

Demchyshyn said that both parties had agreed "to obey the rules" until the end of March.

Under the deal sealed in Brussels, Ukraine's Naftogaz will pre-pay and order sufficient quantities of gas to ensure all domestic consumption for March and guarantee undisrupted supplies to the EU. Gazprom commits to supply a set quantity of natural gas each day at agreed on delivery points.

The European Union imports around 40 percent of its gas from Russia, half through Ukraine.

Complicating the dispute has been deliveries to Ukraine's rebel-held east, where fighting between Kiev's forces and Russia-backed rebels has killed more than 6,000 people.

Kiev cut gas supplies to rebel-held areas last week, prompting Russia to pump gas there directly. Russia said those deliveries should be counted in gas exports to Ukraine.

Under the agreement, Kiev and Moscow acknowledged that the supply issue in eastern Ukraine "is highly complex in legal, technical and political terms", and they agreed that more discussions would be required, a statement said.

The EU's executive Commission has asked the two to propose possible agenda points for further talks before the end of March aimed at agreeing a new gas arrangement for coming months.


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