Russia and the European Union signed a memorandum on the mechanism of early warning in the energy sphere. The document was signed by Russian Minister of Energy Sergei Shmatko and European Energy Commissioner Andris Piebalgs. This is the way for the EU and Russia to prepare for possible winter issues with the transit of gas through Ukraine. The document is expected to be discussed by the heads of the two parties at the RF-EU Summit to be held in Stockholm on November 18.
“The mechanism of early warning is to ensure stable and continuous deliveries of energy carriers, as well as the prevention and overcoming of emergency situations in the energy sphere with minimal consequences,” says the report.
According to Piebalgs, “the new document describes the working process of the warning system, as well as the procedure of the joint work of experts in case of an emergency or conflict situation.” The document, he continued, includes measures to be taken by the parties for preventing conflicts, and in the situation, when a conflict emerges. The mechanism will work not only in gas transportation, but also in the sphere of oil deliveries and the transmission of electricity, ITAR-TASS reports.
In the beginning of 2009, Gazprom suspended gas supply to Ukraine. According to the Russian company, transit fuel for European consumers was supplied to the Ukraine’s Gas Transmission Network but was not delivered to the consumers. This caused the gas giant to suspend the transit of gas through Ukraine.
The transit resumed after contracts were signed between Gazprom and Ukraine’s Naftogaz. However, a number of European countries experienced lack of fuel, which resulted in suspension of work of some factories and municipal establishments.
This year, the Russian party mentioned possible issues with payments for the gas supplied to Ukraine. In November, the Ukrainian party acknowledged the issues, but fulfilled its obligations within the set time frame.
Meanwhile, financial and economic state of affairs in Ukraine is threatening. Fitch Ratings downgraded Ukraine's sovereign rating to B-minus from B along with the ratings of cities and banks of the country, and the rating outlook is negative.
In September, Ukraine’s Naftogaz defaulted on the Eurobond. Later, the main Ukrainian railroad carrier Ukrzaliznytsya experienced a technical default on its syndicated loan of $550 billion. While Naftogaz’s debt was restructured at a raised interest rate, the government was not able to help the Ukrainian railroads.
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