European Commission, Russia, Ukraine initial winter gas supply deal

Five hours of high-level talks in Brussels between Russian Federation, Ukraine and the European Commission had yet to deliver a firm deal on winter gas supplies, an EU source said on condition of anonymity. Also, the parties discussed the possibility of extra lending to Ukraine.Contacts are underway with worldwide financial institutions over the possibility of providing another $500 million to Ukraine by the end of the year, a source close to the trilateral negotiations said.

He also added that Russian Federation is committed to lower the price for Ukraine to the same “competitive level” given to neighboring countries, from $251 per 1,000 cubic meters to $232.

Relations between Russia and Ukraine have been tense during a highly volatile time of civil unrest in Ukraine, where the government has accused the Russian government of backing pro-Russian separatists.

That is partly because the drop in oil prices has pulled down the cost of gas, since the two are linked in the supply contract between Ukraine’s OAO Naftogaz and Russia’s OAO Gazprom.

“I would like to clarify that the European Commission has played a facilitating role in this regard – not one of providing additional finance”.

Russian Energy Minister Alexander Novak, for his part, stressed that Moscow “will spare no effort” to prevent any kind of problem.

“Today, we had a productive meeting and built on that discussion in Brussels [to find] ways to sustain and strengthen those commitments, including ongoing security assistance to Ukraine’s armed forces and border guard service”, the secretary said.

“Airlines with the Russian tricolor have no reason to be in Ukrainian airports”, Prime Minister Arseniy Yatsenyuk told the Ukrainian government cabinet, said the statement posted on a government website.

The war has had a hefty toll on Ukraine’s economy, and on Friday credit rating agency Standard & Poor’s said the country’s sovereign debt was in “selective default”.

The two countries have been haggling since then over the price that would be embodied in a new agreement to secure winter gas supplies.