Arseniy Yatsenyuk considers the Protocol on gas supply should be inked only at the tripartite level among the EU, Ukraine and Russia

margin:2.0cm 42.5pt 2.0cm 3.0cm; mso-header-margin:35.4pt; mso-footer-margin:35.4pt; mso-paper-source:0;} div.WordSection1 {page:WordSection1;} -->
At a Government meeting on Thursday, October 30, Prime Minister of Ukraine Arseniy Yatsenyuk informed about the conditions to sign the Protocol on natural gas supplies at the tripartite level among the EU, Ukraine and Russia.

Arseniy Yatsenyuk told about the course of negotiations on the gas issue in Brussels. He noted that together with the President of Ukraine they had been engaged in talks till 5 o"clock this morning with European Commission President Jose Manuel Barroso and the Ukrainian delegation, staying currently in Brussels to solve the gas problems, "Our position should be fair, transparent and open. In order to sign certain Protocol, we must publicly announce the position. The members of the Cabinet of Ministers and, in particular, people should understand what is signed, what is the objective and which are additional pros and cons from it".

The PM reminded that Ukraine had accumulated in its gas storages 17 billion cubic meters of gas, and in order to get through the cold season we need another 5 billion cubic meters, "We have now increased the volume of reverse natural gas supplies from Slovakia, and in fact only due to the reverse supplies the country is surviving and is warmed. We have replaced 60% of natural gas, which before we had bought from Russia, for natural gas, which we now buy from the European Union".

According to him, throughout the recent month Russia “has started to blackmail Europe and to reduce the volumes of natural gas supplies into the EU member states, so that the EU refused from reverse supplies to Ukraine", "By creating a deficit on the European market, the Russians believed that our European friends would refuse to deliver gas to Ukraine. But this did not happen".

On behalf of the Government of Ukraine Arseniy Yatsenyuk expressed gratitude for the position of the European partners and especially to the Slovak partners for contractual obligations.

Moreover, he said that now it is technically important to start pumping up of extra gas volumes into the storages to get through the peak winter loads.

The Prime Minister stressed that the signing of the Protocol on the supply of natural gas "is only possible at the tripartite level: the European Union, Ukraine and the third party – Russia”.

As for the payment of already delivered gas supplies, the Head of Government informed that Ukraine can pay the price of USD 268, “Gazprom may interpret it on their own way, but our position is that the supplied gas amounts should be paid at the price of USD 268".

"With this aim we have USD 3.1 billion on our accounts, received as a financial assistance from the International Monetary Fund and the European Union. Ukraine has all the necessary funds to pay off all the bills for the natural gas delivered in the past," the PM stressed.

The first tranche of payment for gas, he said, will make up USD 1 billion 450 million, and it “will be transferred as soon as possible, immediately after signing of the Protocol”, "the remaining sum worth USD 1 billion 650 million will be transferred before the end of the current year”.

Another condition, according to Arseniy Yatsenyuk, the deliveries of new gas volumes by Russia should be made immediately after prepayment is made, "just the way we are buying gas from Europe, in the amounts determined by Ukraine", “If Ukraine pays in advance, Russia is obliged to supply natural gas. Therefore, I am surprised with a question of Russia"s concerning financial guarantees for the advanced payment. There are funds, we have paid them – they supply the gas".

Regarding the prices for natural gas, Arseniy Yatsenyuk reminded that the common basic approach of the EU and Ukraine, which had been announced 4.5 months ago, is fixing a price for gas in the summer season worth USD 325 dollars, in the winter period, when energy prices are rising, at USD 385, "Now we have reached the position when the price will be calculated by the formula, which is stipulated by the contract. It affects the cost of oil, the price for which has dropped considerably. This means that in the last quarter of the year, the price will be USD 378, and in the first quarter of the next year it will make up about USD 365".

"The approach to the pricing has been set forth in the Protocol. If Russia violates an order of a pricing procedure and will again try to put a price at USD 500, we in synergy with the European Commission agreed that the European Commission will act as a guarantor of the obligations of the Russian Federation at a fair price forming, also through the mechanism of compensation of an increase of rates, if such a price doesn’t correspond the tripartite Protocol signed between the EU, Ukraine and Russia", explained the PM.

One more condition set forth by the Ukrainian side is that Gazprom refuses from an unfair principle "take or pay".

In addition, Gazprom must pay for the transit of gas to the accounts of the NJSC "Naftogaz of Ukraine".

The Head of Government stressed that a final decision regarding the gas contract would be taken by the Stockholm Arbitration Court, "The Protocol, which is signed, is temporary - for a period of six months. The core lawsuit on compensation of USD 6 billion from the Russian "Gazprom" wasn’t withdrawn by Ukraine and won’t be withdrawn. And the text of this Protocol contains that the final decision on price, delivery conditions and changes into the contract will be made by the Stockholm Arbitration Court".

Arseniy Yatsenyuk also noted that there must be signed an Annex to the contract, which contains the technical issues called to ensure implementation of the tripartite document.

Moreover, the Head of Government informed that he would report the President of Ukraine on the results of the discussion of these issues at the Cabinet’s meeting, "We share a common position with the President and it should be this way. We can focus on this option, as it is a shared position of both Ukraine and the European Union. We must act as a unit, and we are acting this way now".

He noted that he would have this day a number of telephone conversations, in particular with the Vice President of the United States of America Joe Biden and Federal Chancellor of Germany Angela Merkel, "One of the principal issues to be discussed contains the gas agreement and additional financial tools for Ukraine, and it will allow us to stabilize the fiscal situation and to pay our energy bills".

"All possible protectors have been elaborated by us," Arseniy Yatsenyuk said and added that he would inform about the course and final results of the negotiations in Brussels.