An agreement was reached Friday (20 December) on transit rules for Russian gas going through Ukraine. Maroš Šefčovič explains why this is good news for Europe and all parties concerned.
Maroš Šefčovič is European Commission Vice-President in charge of foresight. He also leads trilateral gas talks on behalf of the EU.
Hat-trick before we ring in the New Year. This is the trilateral gas deal struck after the two-day marathon talks (19-20 December) between the European Commission, Russia and Ukraine. Here’s why.
First, we have secured an uninterrupted transit of Russian gas to Europe via Ukraine for a period of up to fifteen years. Long-term security of supply to European households was my number one priority and we have sent a powerful message that the EU is guaranteeing warm homes, stable markets and competitive prices. The deal also helps maintain an important role of natural gas as a ‘bridge’ to a climate neutral European economy by 2050, with the large-scale deployment of renewable energy at its heart.
Second, Ukraine will remain a strategic transit country. During 2020-2024 alone, Russia is set to send altogether 225 billion of cubic meters of gas to Europe via the Ukrainian route. Based on yesterday’s deal, this could be followed by additional ten-year cooperation. It is significant because gas transit revenues are an important source for the Ukrainian national budget. The continued transit will also ensure further investments into the country’s strategic infrastructure, and will facilitate the necessary reforms in the energy sector and beyond.
Thirdly, Russia will maintain its role of a reliable supplier to the European market, while keeping diversified transit routes. In addition, a series of outstanding and long-lasting legal disputes between companies will be put to bed thanks to an amicable out-of-court solution – a critical part of the negotiated deal.
This well-balanced ”protocol” with the key arrangements signed and sealed now pavesthe way for a long-term gas transit contract between companies. But it can achieve even more.
A chance to start fresh
By closing the door on the past in the energy sector, there is an opportunity to hit a reset button in relations between Russia and Ukraine in a broader sense.
The European Commission’s convening power and Europe’s diplomacy with genuine attitude of an honest broker can certainly help. During the gas talks, a trilateral format in particular has proven effective in reaching tangible positive results. We have seen a gradual built up of trust and partnership, key ingredients to every negotiation.
Perhaps, this could serve as an inspiration or a recipe for other challenges, too.