Russia offers Ukraine cheaper gas under new transit deal, Kiev promises to drop $3bn demand

The price of gas for Ukraine may be lower if Moscow and Kiev manage to reach a new transit agreement, Russian President Vladimir Putin told at a press conference after the Normandy Four summit in Paris.

Gas for Ukraine "could be cheaper by 25 percent, as compared to what the end consumer currently gets, primarily the industrial consumer, because the price of gas for the domestic consumer, for citizens [of Ukraine], is subsidized, we can’t calculate the price from the subsidized price," Putin said.

Ukraine’s President Volodymyr Zelensky said in return that there is a good chance that the contract on gas transit from Russia to Europe via Ukraine would be extended after January 1.

Agreement for Russian gas supplies to Ukraine and those transiting to Europe expires at the end of this year. In November, Russia’s Gazprom offered Ukraine to extend the transit contract or enter into a new one for one year.

“There’s no agreement yet, but I’m sure that we have more chances to sign it under better conditions than before," Zelensky told reporters in Paris, adding that "I insisted on the most favorable, ambitious conditions for Ukraine and Europe, which is ten years."

He also said the issue of the $2.56 billion compensation has been taken off the table during the talks, and that Kiev “is ready to take it in gas.”

A Swedish court ruled Gazprom must compensate Ukraine's Naftogaz for the transit of Russian gas through the Ukrainian territory between 2009 and 2017 even though the gas was not, in fact, transited over that period. The court justified its decision by referring to a difficult economic situation in Ukraine. Last month, Russia's Gazprom lost the appeal.

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