Ukraine must pay $3 bln for Russian gas in winter, EU pledges crucial

Ukraine will have to pay around $3 billion for Russian gas this winter, so the European Union's commitments to help Ukraine are crucial, Russian President Vladimir Putin said during a meeting with Cabinet ministers at Novo-Ogaryovo.

Energy Minister Alexander Novak said during the meeting that the European Commission had pledged to provide a first tranche of $500 million in payment for the gas. In addition, agreement had been reached for the EU to help Ukraine pay for gas throughout the winter, he said.

For the first time, the trilateral protocol "reflects the obligation of the EU and the European Commission, which represents the EU, to ensure organization via international financial institutions of provision of financing for Ukraine to purchase gas, including allocation of a first tranche of $500 million to purchase Russian gas in October for injection into underground storage, for reliable passage through the winter period," Novak said.

"How much money are the Europeans giving them?" Putin asked.

"$500 million. This is the first tranche. But we agreed that they would over the course of the winter period help and find funds for Ukraine, through various financial institutions, banks among other sources, since Naftogaz's situation really is difficult, Ukraine's economic situation is quite difficult. They won't be able to cope on their own," Novak said.

"Therein lies the question. Because injecting the remaining gas volume into underground storage is possible, but after that there needs to be payment for Russian supplies throughout the whole winter, and this is about roughly $3 billion. Where are they going to get that money without the assistance of the European countries? For that reason, it is of fundamental importance whether this agreement obligates the European side to secure financing," Putin said.

Novak agreed that "this was fundamentally important, that this be set down in the given protocol."

"For our part, we signed this protocol. The European Commission signed the protocol. We believe that we have created all necessary conditions for reliably passing through the heating season throughout the course of this winter period," Novak said.

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