Russia, Ukraine sign 5-year Gas Transit Deal.

1 Jan 2020

Russia and Ukraine have signed a five-year, $7 billion deal on the transit of Russian natural gas to west. About 40 percent of the 200 billion cubic meters (bcm) of gas that Russia has sent to Europe annually has been transmitted via Ukraine’s vast network of pipelines.
 Under the new contract, Kyiv next year is expecting to ship a minimum of 65 bcm, or about 22 bcm less than it did in 2018. Minimum volumes will decrease further to 40 bcm in 2021-24.
 The new deal has a “pump or pay” clause, meaning Russia must pay the minimum gas-transit fee even if it doesn’t pump the contracted volumes through Ukraine.
 The new deal stipulates that “both sides reserve the right to extend the contract for another 10 years” after its expiration.
Also part of the new contract is Russia agreeing to pay $2.9 billion to Ukraine as part of a Stockholm arbitration court ruling, which Moscow did on December 27.
In turn, Naftogaz has promised to release seized assets belonging to Gazprom in Europe and both parties have agreed to drop reciprocal court claims that haven’t concluded and sign an out-of-court settlement.

 Source: rfe/rl.

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