The new Russia-Ukraine gas agreements
Gas negotiations between Russia and Ukraine were ultimately successful: a package of agreements has been reached which allow Russian gas to be transported through Ukraine for five years at a roughly 50% level compared to average volumes of the past five years. Enabling factors included the successful unbundling process of Naftogaz in a race against time, Ukraine’s focus on achieving short-term gains, Russia’s willingness to bend to the Stockholm arbitration awards payment. With sanctions from the United States on Nord Stream 2, Russia was plunged into uncertainty over the opening of this alternative route and compelled to secure a longer and larger deal with Ukraine than it initially considered. Next issues to watch for are two remaining legal disputes, Gazprom’s possible direct gas supplies to Ukraine, and the fate of the Yamal-Europe transit pipeline.