The Cabinet of Ministers unveiled the protocol of negotiations on gas transit between representatives of the European Union, Ukraine and the Russian Federation.The talks took place in Berlin and Minsk on December 19-20, in which the Operator of the Gas Transportation System Operator of Ukraine LLC, NAK Naftogaz Ukraine, PJSC Gazprom also participated. The text of the document is presented on the government website.
It follows from the protocol that the agreements between the interested companies of Ukraine and the Russian Federation on the transit of Russian gas through the territory of Ukraine from January 1, 2020 imply the implementation of a number of points.
In clause 1.1. it is noted that in order to resolve legal differences by December 29, 2019 Gazprom and Naftogaz Ukraine will sign a settlement agreement providing for:
- payment of about $ 2.9 billion until December 29, 2019, including interest in accordance with the decisions of the Stockholm Chamber of Commerce and Industry of December 2017 and February 2018,
- recall of all arbitration and legal claims against each other for which no final decisions have been made, incl. claims of Naftogaz Ukraine NJSC for 12.2 billion US dollars and 1.33 billion cubic meters (without monetary value),
- the removal of arrests on the property, assets and funds of PJSC Gazprom, as well as the renunciation in the future of all possible claims and claims under contracts for the supply and transit of gas dated January 19, 2009;
Clause 1.2. indicates that until December 29, 2019, Gazprom and Ukraine will conclude an irrevocable amicable agreement in the framework of case 2019-10: Gazprom against. Ukraine, currently considered by the arbitration court in Geneva, Swiss Confederation. Such an amicable agreement will provide, inter alia, for the termination by Ukraine of all current and possible future requirements for PJSC Gazprom, based on the decision of the Antimonopoly Committee of Ukraine No. 18-r of January 22, 2016 and the corresponding decision of the Commercial Court of Kyiv of 05.12 .2016 (including claims for the payment of fine and penalty);
Clause 2. In order to continue the uninterrupted transit of Russian gas through the territory of Ukraine:
2.1 PJSC Gazprom will sign an agreement with Naftogaz Ukraine (hereinafter referred to as the Organizing Company) on the organization of gas transportation through the territory of Ukraine;
2.2 fulfilling the agreements provided for in paragraph 1, the following will be ensured by December 29, 2019:
2.2.1 PJSC Gazprom and Gas Transportation System Operator of Ukraine LLC will enter into an inter-operator agreement;
2.2.2 The organizing company and the Gas Transportation System Operator of Ukraine LLC will conclude a transport agreement (gas transit contract). During 2020, Ukraine will make the necessary changes to the model of contract in order to bring it into line with the transport agreement between the organizing company and Gas Transport System Operator of Ukraine, and the parties to the transport agreement will sign a model contract without changing the essential parameters of the contract (terms, transportation volumes tariff) without any penalties for the parties;
2.2.3 The organizing company will contact the Gas Transportation System Operator of Ukraine LLC to reserve the capacities of the Ukrainian gas transportation system. At the same time, the reservation of capacities of the Ukrainian GTS over the years will be carried out in the following volumes:
2020 - 65 billion cubic meters of gas;
2021 - 40 billion cubic meters of gas;
2022 - 40 billion cubic meters of gas;
2023 - 40 billion cubic meters of gas;
2024 - 40 billion meters of gas;
provided that at the time of booking Ukraine will establish a competitive tariff recognized by the organizing company and corresponding to the level of gas transportation tariffs applied in Western and Central Europe.
The parties to the gas transportation agreement intend to further consider the possibility of extending cooperation on gas transit on similar conditions for the next regulatory periods of the Ukrainian gas transportation system operator 2025-2034.
3. The parties until December 27, 2019 will take the necessary measures (create the necessary conditions) for the relevant companies to fulfill the above agreements, including:
3.1 The European Commission guarantees and confirms in writing the certification of Gas Transportation System Operator of Ukraine LLC as a new operator of the Ukrainian gas transportation system in accordance with EU standards, as well as the compliance of Ukrainian legislation in the field of gas transportation regulation with EU requirements
3.2. The Ukrainian Party will take all necessary measures by December 29, 19 (create all necessary conditions):
- to conclude amicable agreements with PJSC Gazprom, referred to in paragraphs 1.1 and 1.2 of this protocol;
- to make a final decision on certification of a new operator of the gas transportation system of Ukraine and on the issuance of a license of Gas Transportation System Operator of Ukraine LLC;
- to guarantee the legal validity of the decision on the terms of booking capacities in 2019 and the possibility of concluding a new transport agreement as amended by the parties to the transport agreement in accordance with clause 2.2.2;
- to ensure the independence of the national regulator, the stability of legislative regulation, reliable legal protection of the interests of the customer of transit services, predictability, transparency, economic feasibility and stability of tariff setting;
3.3 The Russian side will take the necessary measures (create the necessary conditions) for PJSC Gazprom to fulfill its obligations in accordance with the agreement stipulated in clause 1.1 on payment on decisions of the Stockholm Chamber of Commerce and Industry of December 2017 and February 2018.
4. Subject to the full implementation of the agreements provided for in paragraphs 1-3 of this Protocol, the parties will consider the possibility of gas supplies to Ukraine, taking into account the principle of pricing based on the price of the European hub (NCG), except for a reasonable discount taking into account the volume of such supplies.