The EU is afraid to give credit for pumping gas to defaulting Ukraine
Russia, the European Commission and Ukraine, following a meeting in Brussels on Friday, agreed on a “winter package” of gas supplies. However, the trilateral final protocol was never signed. The participants in the negotiations promised to formally consolidate the agreement within a week, Rossiyskaya Gazeta reports.
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“We agreed on mutual obligations that should ensure reliable passage of winter during the current winter period, reliable transit of gas through the territory of Ukraine to European consumers. The obligations concern all three parties,” the publication quotes the head of the Russian Ministry of Energy, Alexander Novak, who also noted that the EU must ensure the organization and attraction of financing from international financial organizations and banks.
We are talking about allocating $500 million to ensure the injection of two billion cubic meters of fuel into underground gas storage facilities in Ukraine, but it is likely that the country may need additional volumes. According to Gazprom’s calculations, the newspaper continues, this is five to seven billion cubic meters, the purchase of which requires $800 million.
At the same time, as the head of Gazprom Alexey Miller noted, the issue of additional financing was discussed at a meeting in Brussels, but the parties did not document the need to allocate the required amount to Ukraine.
“Ukraine is clearly in a state of default and is unlikely to be able to repay its debts in the foreseeable future. Banks and financial institutions of EU countries understand this well, so it will be very difficult for Kyiv to obtain new loans for additional volumes of gas,” commented Rustam Tankaev, leading expert of the Union of Oil and Gas Industrialists of Russia, commenting on the situation.
The EU is wary of providing a loan to a defaulting Ukraine to pump gas.