Temporary stabilisation: Russia-Ukraine gas transit deal. OSW Commentary NUMBER 317 31.12.2019

A five-year contract concerning Russian gas transit via Ukraine was signed after four days of negotiations on 30 December 2019. The previous contract expired on 1 January 2020. The EU-brokered talks between Moscow and Kyiv preceding the deal lasted many months and ended in the signing of a political protocol on 20 December which defined the terms of a package agreement. Gazprom has been obliged under the new transit contract to transport 65 bcm of gas in the first year and 40 bcm in the next years based on the ship-or-pay formula. Four other documents were also signed: (1) an agreement between Naftogaz and Gazprom waiving counterclaims linked to the gas contracts of 2009; (2) an interconnection agreement between Gazprom and a company named Operator of the Gas Transmission System of Ukraine (OGTSU); (3) a settlement between Gazprom and the Ministry of Justice of Ukraine; (4) a transport agreement between Naftogaz and OGTSU. The Russian company had to pay US$2.92 billion in damages under the Stockholm Arbitration Court’s ruling before the documents could be signed; it did this on 27 December