Ukraine backs off from EU-backed Russia gas deal

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SHAFAQNA (Shia International News Association)

War-torn Ukraine on Saturday distanced itself from an EU-brokered agreement with Russia that would have restored its gas supplies during winter and helped rebuild trust between the neighbouring foes.

The European Union s energy commissioner emerged from hours of acrimonious negotiations in Berlin on Friday to pronounce the three-month dispute on the verge of being resolved.

“We have developed a workable design for a winter package,” Guenther Oettinger said.

Both he and Russia s energy minister added that a final agreement could be signed after consultations in Moscow and Kiev next week.

A compromise would not only save the Westward leaning nation from adopting drastic energy savings measures in freezing weather but also make sure that Russian gas flowed uninterrupted to European homes.

© AFP
EU-Commissioner for Energy Guenther Oettinger leaves after talks on energy security with Russian and Ukrainian energy ministers on September 26, 2014 in Berlin 
© AFP/File Odd Andersen
Yet the meeting came with trust between all sides lacking and any remaining goodwill between Moscow and Kiev dependent on the fate of a fragile truce in a pro-Russian uprising that has claimed more than 3,200 lives.

Ukraine s top energy officials vowed on Saturday to keep fighting over both the gas price and Moscow s claim that Kiev owed it billions of dollars in debt.

“No final decision was adopted. Not a single document was signed — period,” Naftogaz state energy firm chief Andriy Kobolev wrote in a Facebook post.

 

–  Lots of disagreements  –

 

The deal s interpretations in Moscow and Kiev diverged on almost every point that led to the original freeze of Russian deliveries in June.

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Ukrainian servicemen patrol on armored personnel carriers in the eastern Donetsk region in the early hours of September 26, 2014 
© AFP/File Anatolii Boiko
Oettinger said the compromise would see Russia ship at least 5.0 billion cubic metres of gas to Ukraine over a six month period in exchange for an early payment of $3.1 billion (2.4 billion euros).

The volume roughly covers the amount of gas Ukraine says it needs to make it safely through the winter.

That translates into a price of $385 per 1,000 cubic metres — 20 percent less than the figure Russia began charging Ukraine in the wake of the February ouster in Kiev of an unpopular Kremlin-backed president.

But Russia said the $3.1 billion would be used to cover a $5.3-billion debt Ukraine had incurred since last year due to both its financial problems and refusal to pay the higher rate.

It added that the $385 figure was only a temporary discount due to expire in the spring.

“The chances of us reaching a final agreement along these lines are high,” Russian Energy Minister Alexander Novak told the Vesti 24 state news channel.

© AFP
Gazprom CEO Alexey Miller (L) attends a press conference with energy ministers after talks on energy security on September 26, 2014 in Berlin 
© AFP/File Odd Andersen
Ukraine disputed both points and Oettinger himself shed little light on which side was right.

“There are still lots of disagreements,” Ukranian Energy Minister Yuriy Prodan told AFP by telephone shortly after the Berlin talks broke up.

Naftogaz and Gazprom have filed mutual claims over the entire dispute with a Stockholm arbitration tribunal.

Oettinger said a more permanent arrangement could be worked out once a verdict is issued in the first half of 2015.

 

– Gradual withdrawal of forces –

 

Ukraine s pipeline transmits just 15 percent of the Russian gas imported by Europe.

© AFP
The Ukrainian flag flies at check point in the Donetsk region, September 26, 2014 
© AFP/File Anatolii Boiko
But EU powers such as Italy — reliant on the Ukrainian link for all their Russian supplies — fear that Kiev may be forced to tap into those flows once the winter heating season begins.

The apparent failure to achieve meaningful progress came as Moscow-Kiev relations remain dependent on the survival of a tenuous peace pact that has been unveiled in stages since early September but whose terms remain unfulfilled.

Russian and Ukrainian defence officials did take a cautious step on Friday toward establishing a 30-kilometre (19-mile) buffer zone along the front line that made sure the five-month war did not resume.

The Ukrainian defence ministry said both guerrillas and government forces would begin “a gradual withdrawal of forces” if no truce violations were recorded in the two days.

The military spokesman said one Ukrainian soldier and a civilian had been killed since Friday morning.

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