22 January 2019, News Wires — Ukrainian state energy company Naftogaz does not expect progress in gas transit talks on Monday with Russia which it says is delaying negotiations in order to get its Nord Stream 2 pipeline built first.
Russia’s planned doubling of capacity on the Nord Stream pipeline across the Baltic Sea to Germany could help Moscow bypass exports via Ukraine.
That would deny Kiev of transit fees that account or up to 3 percent of its gross domestic product (GDP).
“Gazprom is delaying real talks in terms of transit in order to build Nord Stream 2 and then to have a different negotiating position,” Naftogaz Deputy Chief Executive Yuriy Vitrenko told Reuters.
“Then they will say, ‘We are okay without any Ukrainian transits at all’.”
To ease market concerns, Vitrenko said the two sides should aim to reach an agreement by the beginning of the summer.
The European Union is chairing Monday’s three-way meeting in Brussels with Ukraine’s Foreign Minister Pavlo Klimkin and Russian Energy Minister Alexander Novak.
The Ukraine has stopped buying gas from Russia in the wake of Moscow’s annexation of Crimea in March 2014 and the EU has called on member states to lessen their reliance on Russian energy imports.
“We need a strong commitment by the two sides to advance in the talks, given that the existing transit contract expires at the end of this year,” European Commission Vice President Maros Sefcovic said ahead of the meeting, which executives from Naftogaz and Russian gas producer Gazprom will also attend.
Moscow and Kiev have clashed frequently over energy. A lengthy legal dispute between Gazprom and Naftogaz led to court rulings in February 2018 which instructed each company to compensate the other.
Naftogaz emerged the net winner, gaining $2.56 billion from Gazprom. Gazprom is challenging the ruling.
Gazprom’s partners in the $11 billion Nord Stream 2 pipeline project include Germany’s Uniper and Wintershall and France’s Engie.