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Fraught Gas Talks Between Russia, Ukraine, EU To Resume In Berlin

Naftogaz CEO Andriy Kobolyev speaks to the press after gas talks between the EU, Russia, and Ukraine in Brussels in October.

The next round of natural-gas transit talks between Russia, Ukraine, and the European Union are set to resume in Berlin on December 19.

The talks aim to reach a new contract before the current 10-year deal between Moscow and Kyiv expires on January 1.

European Commission Vice President Maros Sefcovic is expected to mediate the talks.

The CEO of Ukraine’s state-owned oil and gas firm Naftogaz, Andriy Kobolyev, has said the sides will “likely” fail to sign a new agreement.

If so, the parties can renew talks as early as April 2020, he told Interfax, adding that Ukraine has nearly 20 billion cubic meters (bcm) of gas stored underground, enough to get through a normal winter.

Kyiv is seeking a long-term replacement deal, similar to the existing one, which has earned Naftogaz about $3 billion annually in gas-transit fees.

Naftogaz is demanding a 10-year deal but has suggested it would accept a seven-year deal. Conversely, Russia’s state-run Gazprom has offered a one-year deal and has hinted it could accept a three-year deal.

Complicating matters is Russia having completed 90 percent of the 1,222-kilometer Nord Stream 2 pipeline, which connects to Germany underwater.

Its yearly capacity of 55 bcm would technically give Russia the means to stop transmitting gas across Ukraine.

Somewhat bolstering Ukraine’s negotiating position are U.S. sanctions that were passed this week on Russia’s Nord Stream 2 project.

The restrictive measures target pipe-laying vessels and include asset freezes and the revocation of U.S. visas for the contractors.

Based on reporting by Interfax, Bloomberg, dpa, and Ukraine Business News