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Ukraine Gazprom Agreement

After intense negotiations, Russia and Ukraine signed a five-year contract for the transit of Russian natural gas to Europe worth $7 billion before the end of the year. The agreement negotiated in Vienna was confirmed on December 30 by Russian and Ukrainian gas companies, as well as Ukrainian President Volodymyr Selenskyj, in a letter on social networks. The current deal was set to expire on December 31, jeopardizing Europe`s vital connection to billions of cubic meters of Russian gas through Ukrainian gas pipelines in the depths of winter. About 40% of the 200 billion cubic meters of gas (bcm) sent to Europe each year by Russia passed through Ukraine`s huge pipeline network. The energy relations between the two neighboring countries are part of a larger geopolitical conflict with the military occupation – Russia invaded and annexed Ukraine`s Crimean peninsula in 2014 and supported separatists in the eastern part of the country – allegedly managing cyber warfare, propaganda and international complaints of human rights violations and misappropriated assets. Russia`s Gazprom said the deals were part of a „grand package aimed at restoring the balance of interests of the parties.” The new five-year gas contract also includes the possibility of extending the agreement for a further 10 years, according to Ukrainian Energy Minister Oleksiy Orzhel. Under the new deal, Russia`s Gazprom, which supplies more than a third of Europe`s gas needs, would use an agent to reserve the transit of 225 billion cubic meters (bcm) of fuel through Ukraine over five years. Gazprom and Naftogaz of Ukraine have entered into an irrevocable settlement agreement that provides for the termination of all ongoing arbitration and legal proceedings between the parties and for the parties to waive in the future any claims arising from the supply and transit contracts of 19 January 2009. Prior to the signing of the agreement, Gazprom had paid $2.9 billion to Naftogaz, in accordance with the judgment of the Stockholm Court of Arbitration, within the deadlines set by the protocol. These agreements are the culmination of important rounds of negotiations in recent weeks, during which Gazprom committed to pay a US$2.9 billion debt to Naftogaz as part of the Stockholm transit arbitration in February 2018. Naftogaz confirmed receipt of the silver on December 27, 2019. Gazprom`s Russian chief, Aleksei Miller, described the agreements as „a great package that has restored the balance of interests between the parties.” In addition, according to Vitrenko, transit charges for additional volumes would „increase significantly” beyond the minimum amount. Russia has halted gas deliveries to Ukraine twice in 2006 and 2009, so households and businesses are in the cold there and in countries further west.

Today, representatives of Naftogaz, Ukraine`s Gas Transmission System Operators (WSWGs) and Gazprom signed a series of agreements to continue the transit of Russian gas through Ukraine until 2024 inclusive. . . .