Russia and Ukraine have agreed to secure the flow of natural gas into Europe for the next five years. A deal between the two countries satisfies the economic needs of all three parties involved. Russia guarantees the export of its gas, Ukraine continues to benefit financially from transiting the gas, and the EU receives a steady supply of gas for the immediate future.
Gazprom, the Russian gas monopoly, will pipe 65 billion cubic metres of gas into Europe in 2020. The amount will fall to 40 billion over the next four years. The agreement mentions the possibility of extending the contract by another ten years upon maturity.
Ukraine will receive up to $7 billion in transit fees, which would be around 5 percent of its national budget.
An agreement has not (yet) been reached on direct gas supplies to Ukraine. For the time being, it only stands to benefit financially.
Naftogaz, the Ukrainian gas company, will also receive $2.9 billion from Gazprom in overdue transit payments following an arbitration court ruling in Sweden. In return, Ukraine has agreed to drop $12.2 billion in additional legal claims. Read more “Russian-Ukrainian Gas Deal is a Trilateral Victory”