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Brussels Gas Talks Made Progress
02 July 2009
Published in
Inform
issue #117
See the full issue here.
EU, Ukrainian and Russian officials met on Monday in Brussels along with representatives from leading banks to try to find a way to assist Ukraine to pay for gas to be put into storage. Last January’s gas deal committed Ukraine to purchase vast amounts of gas from Gazprom to put into store for onward sale to Europe in the winter months.
Although Naftohaz Ukrainy has given assurances that it will pay its bill for gas imports in June (see article “Gas Bill for June Will be Paid”), the extra purchase of nearly 20 billion cubic metres of gas for storage would require financing to the tune of $4.2 billion. However, European experts now say that only another 8-10 billion cubic metres of gas is needed, which would bring down the cost to $2 billion.
See the full issue here.
EU, Ukrainian and Russian officials met on Monday in Brussels along with representatives from leading banks to try to find a way to assist Ukraine to pay for gas to be put into storage. Last January’s gas deal committed Ukraine to purchase vast amounts of gas from Gazprom to put into store for onward sale to Europe in the winter months.
Although Naftohaz Ukrainy has given assurances that it will pay its bill for gas imports in June (see article “Gas Bill for June Will be Paid”), the extra purchase of nearly 20 billion cubic metres of gas for storage would require financing to the tune of $4.2 billion. However, European experts now say that only another 8-10 billion cubic metres of gas is needed, which would bring down the cost to $2 billion.
The meeting in Brussels was designed to find a
solution to the funding issue. Russia had earlier
ruled out a loan to Ukraine and no mechanism exists
for the EU to make a bilateral loan to the country.
Participants, including the International Monetary
Fund and the World Bank, said any assistance
package would be contingent on continued reform of
Ukraine’s gas sector.
Sources close to the European Commission do not expect the matter to be resolved immediately and that it is first necessary to send a technical and financial mission to Ukraine to inspect its gas storage facilities and evaluate financial needs. Only then can a resolution be reached. Nevertheless, the EU’s executive arm said, “The participants made good progress in identifying the keys issues of concern and elements for possible solutions including possible financing arrangements.”
Sources close to the European Commission do not expect the matter to be resolved immediately and that it is first necessary to send a technical and financial mission to Ukraine to inspect its gas storage facilities and evaluate financial needs. Only then can a resolution be reached. Nevertheless, the EU’s executive arm said, “The participants made good progress in identifying the keys issues of concern and elements for possible solutions including possible financing arrangements.”