November 5, 2019 / 11:44 AM / 3 months ago

Ukraine, Russia may sign gas transit deal in late December: minister

FILE PHOTO: Ukraine's Minister of Energy and Environmental Protection Oleksiy Orzhel speaks with the media outside the EU Commission headquarters in Brussels, Belgium October 28, 2019. REUTERS/Yves Herman

KIEV (Reuters) - A gas transit agreement between Ukraine and Russia could be signed in the last days of this year, the Ukrainian energy minister said on Tuesday.

Kiev and Moscow have held several rounds of negotiations on the contract, which expires on Dec. 31. Russia wants to strike a short-term deal while Ukraine is seeking a long-term agreement to guarantee supply to its own consumers.

Kiev has said it supports the idea of a new 10-year transit contract, with a guaranteed minimum yearly transit volume of 60 bcm and 30 bcm of additional flexibility.

“We are working on different options, it (the agreement) will probably be signed in the last days of December. But we want to agree all numbers, all volumes and other elements of the contract in advance,” Energy Minister Oleksiy Orzhel told reporters.

He said that Kiev hoped that gas talks between Ukraine, Russia and the European Union would continue next week but Ukraine has not yet received the consent of all parties.

Ukraine is one of the main routes by which Russian gas travels to Europe. Moscow’s construction of new pipelines, such as Nord Stream 2 and TurkStream, will cut Russian gas transit through Ukraine to a trickle.

Last year, Kremlin-controlled Gazprom (GAZP.MM) supplied Europe with more than 200 billion cubic meters (bcm) of gas, of which 87 bcm went through Ukraine, providing Kiev with transit income of around $3 billion.

Reporting by Natalia Zinets, writing by Pavel Polityuk, editing by Louise Heavens

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