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Ahead of New Year Deadline, Russia-Ukraine finalize deals for gas transit to Europe

Russia-Ukraine finalize deals for gas transit to Europe
Russia-Ukraine finalize deals for gas transit to Europe

 Russia and Ukraine gas companies have finalized a string of agreements for unhindered Russian natural gas transit to Europe.

Just ahead of a new year deadline, Russia and Ukraine have signed a 5-year agreement on the transit of Russian gas through Ukraine. The Ukranian president welcomed the agreements stating that the said agreements would pave the way for Ukraine to receive nearly $7 billion in transit payment, spread throughout five years.

Russia ships a large part of its natural gas to Europe through pipelines that run through Ukraine. The agreements are said to provide ease to the European fears of hindrance in Russian gas supplies, as the earlier deal was set to expire on the New Years’ eve.

The agreements have given finalization to the deal arrived at earlier this month. The deal includes shipments of around 65 billion cubic meters natural gas passing through Ukraine and after that 40 billion per year from 2021 to 2024. The Russian state-controlled gas giant Gazprom will transit this volume of natural gas. This comes after Gazprom paid $2.9 billion to Ukraine’s Naftogaz as a settlement of a dispute over transit fees.

Even as the two nations remain embroiled in issues like Russia’s annexation of Crimea and its support for a separatist insurgency in eastern Ukraine, the agreements stand to be finalized. Russia has been trying to build new ways to supply natural gas to Europe through which it could bypass Ukraine and one of these projects includes the Nord Stream 2 project between Russia and Germany. Russia has said that it will complete the project even as the U.S. Senate has voted to put sanctions on companies working on it.

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