Ukraine needs an own version of gas contract, and not just with terms

Contracts signed under duress have always contained threats for the party forced to sign them. The existence of an own vision of cooperation laid down on paper allows to minimize this risk.

Ukraine should go to negotiations with the Russians with an own version of the gas transit contract. In all previous years, Russia’s tactic was to delay discussion of concrete points of the contract to the last and create a crisis, and in these conditions, put pressure on the counterparty and force it to sign the version Gazprom wants.

The contract should stipulate not just its validity period. Since Ukraine declares the intention to join the EU’s gas market, there is a whole number of new elements to the contract comparing to the existing version. These elements include transposition of the gas handover point from the western to the eastern border – this way, European companies will be dealing with not only Gazprom but also the Ukrainian transmission operator. This is also transition to the principle of booking the capacity, not the physical volume of transmitted gas. The virtual gas reversal option must also be open. Bearing in mind the Russian practice of deliberately lowering gas pressure, the liability in this respect should be stipulated as well. All of these are the points which Gazprom will hardly mention in its own versions of the contract but which are principled and important for Ukraine’s energy security.

Having an own version of contract conformant with European rules, Ukraine would also give European energy companies an idea of what the Ukrainian party wants and what could be expected from its negotiation stance. It would disprove the allegations of Ukraine’s unreliability and unpredictability as a transit country, which are actively disseminated by Gazprom’s lobbyists abroad.

 

Olena Pavlenko, DiXi Group President

LIGA. Blogs

Olena PavlenkoPresident of DiXi Group
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