Russia, Ukraine Disclose Details Of New Gas Transit Deal

News of the deal was first reported late on December 20, ending worries that Europe could be without a large amount of Russian gas, which it relies on for heating and industry.

Russia ships about 40 percent of its European gas deliveries through pipelines that cross Ukraine. The current contract is due to expire at the end of the year and delays in concluding a new one caused concern in Europe.

Officials in the Russian and Ukrainian capitals said they plan to have the new contract signed before New Year’s Day.

Ukrainian Energy Minister Oleksiy Orzhel said on December 21 that the agreement foresees shipments of 65 billion cubic meters through Ukraine in 2020 and annual shipments of 40 billion cubic meters thereafter.

Those amounts are smaller than what Russia has sent through Ukraine in previous years. Russia has been working intensively to build new delivery networks that bypass Ukraine.

Those networks include the under-construction Nord Stream 2 undersea pipeline between Russia and Germany, whose immediate future has been thrown into doubt after the company laying sections of the pipeline said it is suspending work because of U.S. legislation threatening sanctions.

The Ukraine-Russia deal also includes payment by Russia of $2.9 billion to settle an arbitration claim arising from previous transit disputes, and waives new claims, said Aleksei Miller, head of Russia’s state natural gas monopoly, Gazprom.

Ukraine stopped importing gas directly from Russia in 2015 after Moscow sent troops into Crimea the previous year, eventually taking it over while backing separatists in two eastern Ukrainian regions.

Instead, Kyiv gets Russian gas indirectly through reverse flows from neighboring EU countries, namely Slovakia, Poland, and Hungary.

An additional reverse-flow point is expected to open with Romania on January 1.

With reporting by TASS, AP, AFP, and Reuters