Russia offers Ukraine deal to extend gas transit contract for 1 year

Russian energy major Gazprom wants to extend the existing agreement, which expires next year, or sign a new deal for one year on gas transit through Ukraine with the country’s national oil and gas firm Naftogaz.

After considering the forecast for European consumers' gas demand for 2020, Gazprom sent its official proposal to Naftogaz, the Russian company told media on Monday.

However, Gazprom stressed that legal issues must be settled with Ukraine before extending or signing a deal. One of the necessary conditions of the agreement is mutual withdrawal of all claims filed with the international arbitrage, as well as ceasing all court proceedings.

Gazprom also demands the Anti-Monopoly Committee of Ukraine push back its decision to slap the Russian company with a fine over alleged economic competition breach and wants Naftogaz to call off its request for the European Commission to launch a probe against it.

Gazprom is also waiting for a response from Naftogaz on direct gas purchases from Russia. In 2015, Kiev announced that it has halted the purchases of Russian natural gas, and since then has been importing reverse supplies from European nations at a higher price.

Moscow has recently offered Kiev up to 25 percent discount on its direct gas supplies, but Naftogaz insists that this concession would not compensate the sum Gazprom had been ordered to pay by the Stockholm arbitration court. In 2018, the court ruled that the Russian company must pay Naftogaz a $2.6 billion compensation for a shortfall in the delivery of gas to Ukraine, a decision appealed by Gazprom.

The existing gas contract between Moscow and Kiev expires at the end of the year. With the assistance of the EU, the two sides are in talks over the terms of the deal, but multiple trilateral discussions have proven to be futile so far.  Ukraine insists that the agreement must signed for at least ten years, while Moscow offers only a one-year deal.

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