EU-brokered gas talks bedevilled by ‘lack of trust’

BRUSSELS - Negotiators are struggling to clinch a deal on winter gas supplies via Ukraine, with Kiev saying chances are “pretty high”, but complaining of “lack of trust”.

EU-brokered talks between Russia and Ukraine’s energy ministers in Brussels broke off at 4am local time on Thursday (30 October) morning with no result.

They are to resume on Thursday afternoon.

Going into the meeting on Wednesday, Germany’s EU energy commissioner, Gunther Oettinger, told German broadcaster ZDF the chance of success is “50 percent”.

Speaking to EUobserver on Thursday morning, a Ukranian diplomatic source said the chance is “pretty high”.

The price which Ukraine is to pay for Russian supplies between now and March next year has been agreed. Settlement of Ukraine’s old unpaid bills and terms for pre-payment for winter supplies, using EU and International Monetary Fund support, have also been agreed.

But Russia is still declining to enshrine the deal in a binding contract between its supplier Gazprom and Ukrainian distributor Naftogaz.

“The main sticking point is lack of trust … if we agree on supplies for the next five or six months, we need a guarantee that Russia will not later unilaterally change the price”, the Ukrainian contact added, referring to Moscow’s history of broken promises, not least regarding international treaties on its annexation of Crimea or, more recently, regarding the so-called Minsk protocol on a ceasefire in east Ukraine.

If there is no deal by the weekend, Oettinger, who has chaired the gas talks for the past five months, will, on 1 November, step aside to assume his new portfolio, on digital economy, in Jean-Claude Juncker’s European Commission.

He will be replaced by Slovakia’s Maros Sefcovic, Juncker’s man in charge of energy union.

The Ukrainian side met with Sefcovic on Wednesday just in case. The veteran diplomat is well-placed to take over from Oettinger, partly because he speaks fluent Russian, but also because Slovakia depends more heavily than Germany on Russian gas transit via Ukraine.

The EU-brokered talks are taking place in a difficult context.

EU sources claim the words “Opal … South Stream … reverse flow” and “sanctions” have not come up in the winter gas negotiations.

But in a separate decision on Wednesday, the commission declined to let Gazprom pump more volumes via the Opal pipeline, which connects Nord Stream, a Russian-German pipeline, via Germany to the Czech Republic and beyond.

"Gazprom is initiating new talks with the newly elected line-up of the European Commission when it is ready”, Gazprom spokesman Sergei Kupriyanov said.

Russia is annoyed the commission has, on grounds of non-compliance with EU energy law, blocked construction of its South Stream pipeline.

The pipe is to pump gas via Bulgaria and Serbia to the heart of the EU, bypassing Ukraine.

Russia has also complained that EU arrangements to pump gas - originating partly from Russia itself and partly from Norway - via “reverse flow” pipelines from Poland and Slovakia to Ukraine are “illegal”.

Meanwhile, EU ambassadors on Tuesday decided to maintain economic sanctions on Russia over the Ukraine war.

An EU spokesman told press: "there are currently no grounds for changing the EU restrictive measures against Russia”.

EU countries in a statement on Wednesday also criticised Russia for its decision to recognise 2 November elections to be held by pro-Russia fighters in east Ukraine, in violation of the Minsk ceasefire accord.

"We deplore [Russian foreign] minister [Sergeir] Lavrov's remarks about Russia's forthcoming recognition of the elections ‘on the territory of the proclaimed Lugansk and Donetsk People's Republics’,” they said.

“The holding of ‘presidential’ and ‘parliamentary’ elections, called by the self-appointed authorities, would run counter to the letter and the spirit of the Minsk Protocol and disrupt progress towards finding a sustainable political solution”.