EU Predicts Stable Gas Supply For Winter Despite Ukraine-Russia Payments Conflict

The European Union expects a steady gas supply to the continent during the winter following an interim deal between Ukraine and Russia, Reuters reported, citing a senior EU energy official. The statement comes despite Russia not having resumed its gas shipments and Ukraine yet to make payments to Russia.

Ukraine and Russia had signed a deal in late October to continue gas supplies through the winter as a temporary solution to a stand-off on payments even as the two countries remain at odds over the separatist conflict in eastern Ukraine. According to the deal, brokered by the EU, Ukraine’s state-run gas company Naftogaz would pay $2.2 billion to Russia’s Gazprom, along with upfront payments before fresh supplies resumed. Naftogaz has reportedly made a part payment of $1.45 billion but has been silent on future orders.

"So far, everything is in order," Maros Sefcovic, the European Commission's new energy chief, said, according to Reuters, adding: “We are in close and, I would even say, everyday contact with both Ukraine and the Russian Federation, and I hope that we will have no problem with gas this winter."

Russia provides a third of the EU’s gas supplies and half of that is transported through Ukraine. Andriy Kobolev, CEO of Naftogaz, had said on Monday that Ukraine plans to order 1 billion cubic meters of gas from Russia by the end of 2014, and plans to increase that amount every month through the winter season. Ukraine's storage facilities currently have 3.5-months worth of stock, depending on the weather, according to Reuters.

"We are now waiting for the Ukrainian side to order gas," Sefcovic said, according to Reuters, adding: "The Ukrainian side is now discussing how much gas it needs before the end of the winter period, and by the end of December Ukraine will pay off the second half of this debt."

Russia claims Ukraine has to pay $5.4 billion to Gazprom, but this amount is contested and the exact amount will be decided by a tribunal in Sweden. Ukraine currently faces a shortage of coal more than gas, and is threatened by prolonged power cuts. On Monday Yury Prodan, Ukraine’s minister for its energy and coal industries, had said that Russian companies had halted coal exports to Ukraine since Nov. 21, a claim Russia has denied, according to ITAR-TASS.