Ukraine, European Commission Call To Extend Gas Supply Deal With Russia

Ukraine’s main state-run energy firm Naftogaz said on Monday that the European Commission (EC) had proposed extending the firm's current gas supply deal with Russian producer Gazprom until April 2016.

"Naftogaz welcomes the proposal by the European Commission to extend the so-called 'winter package' until the end of the next autumn-winter period," Naftogaz said in a statement, according to Reuters. “Naftogaz has sent a letter to Gazprom in which it suggested the possibility of an extension of the 'winter package'.”

European Commission Vice President Maros Sefcovic reportedly told the two companies that the commission is prepared to hold a trilateral meeting to discuss the proposal on extending the deal in Brussels in mid-April.

Russia had halted its gas supplies to Ukraine last June, citing unpaid debts. Ukraine had complained that Moscow set unfairly high gas prices as punishment for its pro-Western stance.

In October, the two countries signed another gas deal overseen by the EC, which saw Kiev contributing $3.1 billion -- to be paid in two tranches -- in order to maintain the supply of gas to Ukraine.

Ukraine has been seeking alternative sources of fuel, and has looked to countries such as Poland, where it signed a pipeline deal in January to draw on regional gas terminals. On Friday, Kiev also said it would try to restore deliveries of gas from resource-rich Turkmenistan.

Ukrainian and Russian officials held another round of emergency talks in early March after Russia accused Ukraine of leaving over $2 billion unpaid. The two, however, struck a deal that would keep gas supplies to Ukraine going through the month.

Maintaining Russia’s supply is also important to the European Union, which imports about half of its gas from Russia, of which about 40 percent comes from pipelines running through Ukraine.

Ukraine’s energy minister said last week that the country would temporarily stop importing Russian gas from April onwards as the current deal expires. Kiev also said it was confident that Moscow would have to reduce its prices to stay competitive with the EU.

Ukraine currently pays $329 per 1,000 cubic meters of gas, and Russia said the price will increase to $348 in April, but Ukraine has said that a more reasonable price would be between $240 and $250.