Negotiations between Moscow and Brussels on the draft agreement were held on Friday in Vienna, attended by Russian Energy Minister Alexander Novak, Gazprom head Alexei Miller and European Commission Vice President Maros Sefcovic.
Novak told Russian media that Moscow would be willing to provide Kiev with a discount in the fourth quarter of 2015, and the first quarter of 2016. As Kommersant explained, the size of the discount has not been revealed, but the price should be comparable to that paid by other countries in the region, such as Poland, and cheaper than the cost of the gas Ukraine receives by pumping supplies from Europe (estimated to cost Ukraine about $275 per thousand cubic meters, which is $20-30 more expensive than Russian deliveries).
If the deal goes through, Ukraine's underground storage facilities would be filled to 17.4 billion cubic meters in reserves, compared with 16.8 billion in reserves accumulated in 2014. Experts say that this will be sufficient for the winter heating season, if Ukraine were to resume its purchases from Russia.
Kommersant estimates that Russia may offer a discount of as much as $20. However, Ukrainian Energy Minister Volodymyr Demchishin suggested late last month that Ukraine would prefer a discount of $30 to $40, based on the discount proposed for the third quarter of 2015.
The European side has yet to publicize the details of the proposed arrangement with Russia regarding the supply of gas to Ukraine, the European Commission saying only that "the financial issue was among those discussed at the outset of the trilateral negotiations," and that "efforts to assist Ukraine in finding the best financial decisions" are being undertaken.
Maria Belova, an expert for Vygon Consulting, believes that the EU ultimately will agree to provide Ukraine with the necessary funding, given that in the current situation any disruptions in transit during the winter could lead to a serious deterioration of political relations between Moscow, Kiev and Europe. The European Union presently receives about one third of its gas supplies from Russia, with over 40 percent of that pumped through Ukraine.
Over the weekend, Novak warned that if an agreement was not reached soon, Ukraine might not be able to pump the necessary supplies into its storage facilities in time for the beginning of the winter heating season. The minister noted that deliveries should begin by the end of October at the very latest.
