By Naftali Bendavid
BRUSSELS--Insufficient "political will" was to blame for a
breakdown in talks that would have allowed Ukraine to buy natural
gas from Russia for the rest of the year, Maros Sefcovic, the
European Union's energy chief, said Wednesday.
"We really did our utmost to get the parties together," Mr.
Sefcovic said. "I was coming to Vienna with good answers to all the
questions which were put on the table. But what we lacked in the
end was enough of the political will."
Saying a final negotiating session on Tuesday had been
"difficult," Mr. Sefcovic added, "I would not hide that we hoped
that we would come back with better news." The two sides plan to
renew talks later this year.
The European Commission, the EU's executive body, mediated the
talks in Vienna between Ukraine's state oil and gas company, OAO
Naftogaz, and Russian gas giant OAO Gazprom.
Mr. Sefcovic issued a statement late Tuesday saying the two
sides were "still far apart" on a deal. Naftogaz said Wednesday it
was suspending natural gas purchases from Gazprom due to the
inability to reach an accord.
Officials stressed that Ukraine and the EU aren't in danger of
running out of gas.
The EU gets about one-third of its gas from Russia, and about
half of that is transported through Ukraine. The conflict in
eastern Ukraine, and the broader standoff between Moscow and Kiev,
has put those deliveries in doubt.
Naftogaz said it would allow deliveries to Gazprom clients in
the EU and Turkey. And Mr. Sefcovic said preparations--especially
reverse-flow arrangements with Hungary, Slovakia and
Poland--ensured that gas supplies in Ukraine won't be
"endangered."
Ukraine needs an additional 7 billion cubic meters of gas for
the winter, and the reverse flows can supply about 1.8 BCM a month.
"We have the capacity, we have the time, and we have the gas," Mr.
Sefcovic said.
The apparent cause of the talks' breakdown was price. Russia put
forward a rate of $247.18 per thousand cubic meters, which it said
was in line with regional prices, but Ukraine found it too
high.
But Mr. Sefcovic suggested that in the end the differences were
political rather than technical. Russia and Ukraine are engaged in
a bitter military and political confrontation, as Kiev clings to a
shaky cease-fire with Russian-backed separatists in eastern
Ukraine.
"I think you see my frustration. I am not hiding it," Mr.
Sefcovic said. "The lack of will was clearly demonstrated on both
sides."
Negotiators from both sides hope to meet again in late August,
and political leaders aim to reconvene in September.
Naftogaz said it is prepared to renew gas purchases from Gazprom
once "a comprehensive temporary agreement" had been reached,
preferably one that lasts until at least March 31.
Stephen Fidler contributed to this article.
Write to Naftali Bendavid at naftali.bendavid@wsj.com
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