Negotiations on Russian Gas Exports Fail

Investing.com — The negotiations between Moscow and Kyiv to extend the deal for Russian gas exports to Europe via Ukraine have not reached an agreement, according to an insider at Azerbaijan's energy company SOCAR. The deal, brokered by Azerbaijan, was set to expire at the end of this year.

The European Union and Ukraine had requested Azerbaijan to mediate discussions with Russia concerning the gas transit deal. However, Russian President Vladimir Putin stated on Thursday that no new deal with Kyiv would be established to transport Russian gas through Ukraine to Europe.

Ukraine, which has been battling Russia's invasion since February 2022, declared it will not renew the contract that allows nearly 15 billion cubic metres (bcm) of Russian gas to be transported to Europe annually. This volume is a fraction of the 150 billion bcm of piped gas that Ukraine allowed to flow through its territory in 2022.

Ukrainian President Volodymyr Zelenskiy stated on Thursday that Kyiv might contemplate continuing the transit of Russian gas, but only if Moscow agreed to defer payment until after the war, a condition that Russia is unlikely to accept.

Ukrainian PM Denys Shmyhal announced that the transit agreement would cease on the morning of January 1, as reported by Interfax-Ukraine news agency. He added that transit could only recommence for non-Russian gas if the European Commission requested it.

The SOCAR insider disclosed that the company had been facilitating negotiations between Ukrainian and Russian energy companies for nearly a year, upon the request of Ukraine and the European Union. He revealed that senior managers had met with top representatives of Ukrainian energy companies on May 2 in Istanbul and on August 29 in Vienna. Despite these efforts, the Ukrainian and Russian sides were unable to agree on the terms.

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