Ukraine is not yet ready to resume direct supplies of natural gas from Russia, said Ukrainian Deputy Prime Minister for European and Euro-Atlantic integration Dmitry Kuleba. According to the official, direct import of Russian fuel will be possible only within the framework of the pan-European energy market.

“I believe that we are not yet ripe for a return to direct deliveries,” the official said in an interview with Interfax-Ukraine. According to him, the Ukrainian gas market should operate according to EU standards in the energy sector, and Ukrainian energy should be integrated into the European one.

At the same time, Kuleba noted that “nowhere is it written in the rules of the European Union that you should not buy gas from a certain country.”

  • Vice Prime Minister of Ukraine for European and Euro-Atlantic Integration Dmitry Kuleba
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  • © Hennadii Minchenko

Therefore, after the “integral energy market” begins to operate in Ukraine according to European rules, Ukrainian companies will be able to purchase fuel directly from Gazprom. But at the same time, the Russian supplier “will not have a monopoly” in Ukraine, the deputy prime minister added.

Recall that Dmitry Kuleba was approved as vice-premier for European and Euro-Atlantic integration as part of the new government of Ukraine in August 2019. Previously, he worked in the Ukrainian Foreign Ministry, in 2014 he was appointed at the invitation of the head of the department, Pavel Klimkin, to the post of ambassador on special assignments for strategic communications. Until the beginning of 2016, Kuleba was engaged in the formation of public diplomacy of Ukraine and the introduction of modern technologies and communications in the work of the department. In April 2016, by decree of Petro Poroshenko, Kuleba was appointed to the post of Permanent Representative of Ukraine to the Council of Europe.

“True surrender”

It should be noted that direct deliveries of Russian gas to Ukrainian consumers were stopped precisely during the presidency of Petro Poroshenko, in whose government Dmitry Kuleba worked. Recall that at the end of 2013, Moscow and Kiev once again agreed on the supply of Russian fuel to Ukraine at preferential rates. At the same time, the parties agreed that the discount amount will not be fixed, but will be determined at the beginning of each quarter by signing an additional agreement. However, in 2014, Naftogaz violated the requirements of the transaction by delaying the repayment of debt for the supplied fuel. Moscow responded by canceling the discount.

  • Former President of Ukraine Petro Poroshenko
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  • © Valentyn Ogirenko

This did not suit the Ukrainian side, which began to demand that tariff privileges be returned; as a result, Gazprom was forced to switch to prepaid settlements with a Ukrainian counterparty.

In 2015, Kiev refused direct import of gas from Russia, instead, the Ukrainian side now buys fuel from European countries - we are talking about Russian gas, which is supplied to Ukraine according to the reverse scheme. Fuel is first pumped through the Ukrainian gas transportation system to the EU, and then part of the gas is sold to Ukraine.

Under such a scheme, Kiev has to overpay for fuel, since not only the producer’s profit and the cost of transportation production, but also the profit of European intermediaries are included in the cost. In total, the overpayment of Kiev for gas due to the switch to reverse supplies amounted to about $ 1.5 billion over the past five years. Such a sum was announced in mid-December by Verkhovna Rada deputy Andriy Derkach, speaking at a press conference.

Despite the obvious disadvantage of such a scheme, Ukrainian deputies and officials are actively opposed to a return to direct deliveries of Russian gas. These include, in particular, the ex-president of the country, the leader of the European Choice party, Petro Poroshenko. Speaking at the beginning of December in the Rada, the politician said that a possible transition to the purchase of fuel from Russia would be the “surrender” of Ukraine. According to the ex-president, the country is “quite satisfied” with the reverse supply of fuel.

“And now there is not even a minimal need to buy it again in Russia. Not a cube! To return this weapon to Putin’s hands is the real surrender, ”Poroshenko said.

The former Ukrainian leader was particularly worried by the tripartite negotiations on the extension of gas transit between Moscow and Kiev with the participation of the European Commission in December.

As stated in the minutes of the consultations held on December 19–20, “the parties will consider the possibility of gas supplies to Ukraine” subject to a number of agreements reached on gas transit.

A few days later, Petro Poroshenko made a demand to urgently convene the National Security and Defense Council in order to impose sanctions against Ukrainian companies that allegedly had already agreed with the Russian side to purchase gas. As Poroshenko said then, this agreement was allegedly reached during the "secret negotiations in Paris" as part of the summit in the "Norman format."

However, information about upcoming direct gas supplies was soon refuted by the Russian side. As Deputy Prime Minister Dmitry Kozak said during a meeting with Russian Prime Minister Dmitry Medvedev, there are no gas supply contracts between Kiev and Moscow, the parties only agreed to discuss this issue in 2020.

However, the likelihood that such an agreement will be reached in the future is still there, according to the Russian cabinet. As Dmitry Kozak noted earlier, speaking with reporters, the conclusion of an agreement on gas transit may become a “window of opportunity” for the parties. The agreement on fuel transit through Ukrainian territory showed that Kiev and Moscow can, despite all the difficulties, reach agreements on various issues, Kozak said.

Recall that at the end of 2019, Ukraine and Russia signed a package agreement that allowed to extend the transit of gas through Ukrainian territory to Europe after the expiration of the previous agreement. As Gazprom’s head Alexei Miller told reporters, the five-year deal “restored the balance of interests of the parties.”

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  • © Pavel Lisitsyn

Against this background, the statement of Ukrainian Deputy Prime Minister Dmitry Kuleba that the country was “not ripe” for direct gas purchases from Russia sounded rather strange, said Ukrainian political scientist and economist Alexander Dudchak. As the expert noted in an interview with RT, the desire to delay the start of direct gas imports to Ukraine is difficult to explain.

“For the sake of what to refuse direct deliveries (gas from Russia. - RT ), it is difficult to explain. There are no violations of the Third Energy Package rules in these actions, ”the expert explained.

Recall that the Third Energy Package is a pan-European law regulating the European energy market and designed to combat the monopolization of this area.

The words of the Ukrainian official that Ukraine is allegedly not ready for direct fuel supplies have puzzled the Russian State Duma. As Igor Anansky, the first deputy chairman of the State Duma committee on energy, noted in a RT commentary, it’s strange to hear such a statement from a Ukrainian official. In fact, Kuleba’s words mean that Kiev is ready to buy gas at a higher price than possible, the deputy noted.

An appeal to European standards also has no basis in this case, experts are sure. In a conversation with RT, the director of the Center for the Study of World Energy Markets at the Institute for Energy Research of the Russian Academy of Sciences Vyacheslav Kulagin recalled that the application of these norms does not prevent the EU countries from buying gas directly from Russia.

“On the contrary, attempts to exclude one of the suppliers represented by Gazprom now contradict the principle of free competition. A contract with Gazprom would not have prevented Ukraine from buying fuel from other suppliers. Of course, in the framework of direct gas supplies from Russia, Kiev could count on a lower price than now, ”the expert emphasized.

A similar point of view is shared by the leading expert of the National Energy Security Fund Igor Yushkov.

“Such statements are purely Ukrainian specifics, since in a normal market, goods are always bought at the best price. And talking about European standards is fiction, because European standards mean that any supplier is guaranteed access to any consumer, and nothing prevents Ukraine from switching to such an order right now, ”the expert said in an interview with RT.

Question of Naftogaz

Speaking about the reasons why Kiev still does not dare to abandon the costly reverse, Yushkov drew attention to the political conditions that are forcing the new cabinet to continue Petro Poroshenko’s course on gas supplies.

“Now it’s ideologically difficult for the authorities to conclude a contract with Gazprom, since in recent years the government has insisted that Russia is the enemy of Ukraine. And those who oppose this, radical nationalists will accuse of betrayal. However, 90% of Ukrainians do not care who the country buys gas from - people care about its price, and they are not interested in overpaying, ”said Yushkov.

According to Vyacheslav Kulagin, the selfish motives of a certain stratum of the Ukrainian elite are also hidden behind the words about the “unpreparedness” for the direct import of fuel. The uncompetitive situation in which gas enters the Ukrainian market only through Naftogaz allows the company’s management and its affiliates to maintain control over fuel supplies.

“The transition to European standards would allow large consumers to directly buy gas from Gazprom, bypassing Naftogaz. Therefore, now there are attempts by interested circles to maintain control over the gas market of Ukraine. And the point is not the implementation of European standards, but the fact that a certain circle of people is now trying to find a mechanism that will allow Naftogaz to remain in the supply chain, ”the expert summed up.