After months of tense negotiations and years of legal battles, Moscow and Kiev have made a step closer towards an extension to the current gas transit agreement, which expires on December 31.
The sticking points included pricing for Russian gas for Ukrainian consumers and the $3 billion verdict against Russia’s Gazprom by the Stockholm Arbitration court in favor of Ukraine’s Naftogaz.
Russia has been building alternative gas pipelines bypassing Ukraine to deliver natural gas to European customers. One of such routes is Nord Stream 2, which runs from Russia to Germany along the bottom of the Baltic Sea. The project is set to deliver an additional 55 billion cubic meters of natural gas per year.
However, more than 50 percent of Russian gas supplies to the EU will still be going through Ukraine. Russia and its partners, including Germany, have repeatedly stressed that Nord Stream 2 is meant as a supplementary route to guarantee stable supplies to Europe, but will not replace transit through Ukrainian territory.
The gas transit agreement between Russia and Ukraine raises questions about the latest US sanctions against Nord Stream 2, since one of the arguments in Washington for penalizing the Russian pipeline has been that it deprives Ukraine of gas transit fees.
