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EU Ready To Mediate In Latest Russia-Ukraine Gas Dispute


Kyiv and Moscow were drawn into a new gas dispute on March 1, after Russia's state-owned Gazprom unexpectedly decided not to restart supplies to Ukraine.

BRUSSELS -- The European Union is ready to mediate in the latest natural-gas dispute between Ukraine and Russia, with European Commission Vice President Maros Sefcovic expected to contact the energy ministers of the two countries.

Speaking at a press briefing in Brussels on March 2, the vice president's spokeswoman, Anna-Kaisa Itkonen, said: "Vice President Sefcovic yesterday was contacted by the minister of foreign affairs of Ukraine who asked him to activate consultations regarding possible trilateral negotiations with the Russians and Ukrainians.

"As always, the commission stands ready to facilitate such talks when there is a request from both sides. Vice president Sefcovic is going to get in touch today with both the energy minister of Ukraine and Russia to touch base on this."

Kyiv and Moscow were drawn into a new gas dispute on March 1, after Russia's state-owned Gazprom unexpectedly decided not to restart supplies to Ukraine, forcing Kyiv to reduce supplies despite freezing temperatures and leading to the closing of many schools and universities.

Gazprom said it had returned a prepayment to Ukraine and would not restart gas supplies because an additional agreement to the existing arrangements had yet to be reached.

Ukrainian Prime Minister Volodymyr Hroysman in a March 2 televised address attempted to reassure the public, saying that alternative supplies had been arranged after Ukrainian energy company Naftogaz said it signed an urgent contract with Poland’s PGNiG.

Hroysman said he expected the country's supply situation to be restored to normal within five days.

Gazprom's move follows a decision on February 28 by the Stockholm arbitration court stating that Gazprom had to pay $2.56 billion to Naftogaz after weighing mutual claims and counterclaims related to gas supplies and transit after several years of commercial disputes.

In a statement, Gazprom CEO Aleksei Miller said on March 2 that the court ruling meant the company's gas deals with Ukraine would no longer be commercially viable, so it had no choice but to ask the court to terminate them.

Gazprom also has said it would terminate its gas contracts with Ukraine.

"Gazprom had to immediately start the procedure of the termination of the contracts with Naftogaz on gas supplies and transit at the Stockholm arbitration court," Miller said.

The row, which is a by-product of broader political tensions between the two countries after Russia's illegal annexation of Crimea and its support for separatists in the conflict in eastern Ukraine, is also threatening to have an impact on gas supplies to the EU.

However, EU spokeswoman Itkonen did not indicate that gas supplies to the bloc were being affected yet.

"According to the information that we have at the moment, gas flows to the EU are normal and stable but of course we monitor the situation very closely. What I can add about the storage level in Ukraine, it is just below 10 billion cubic meters, which is very good for this time of the year, so there are no anomalies there for the time being."

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