Supplies to Donbass have become a grey area

Russia and the Ukraine after the talks in Brussels have consolidated "frozen status" of gas supply to Donbass. Russia insisted that they should be paid by Kiev, but agrees to continue to supply to the Donetsk and Lugansk People’s Republics without guarantees of payment and on uncertain terms. Now the parties begin new negotiations on how gas will be supplied to the Ukraine in summer: Kiev has shown a willingness to do without Gazprom and insists on a price of no higher than $300 per 1 thousand cubic meters.

The negotiations of Energy Ministers of Russia and the Ukraine Alexander Novak and Vladimir Demchishin ended late Monday with the mediation of the Deputy Head of the European Commission Maroš Šefčovič, and officially formalized the "controversial" status of the Russian gas supplies to Donbas. The Ukraine achieved that these supplies wouldn’t be carried out on Naftogaz Ukrainy’s orders, Gazprom will supply gas to Ukrainian companies in the amounts and to those points that will be listed by Kiev. Russia also failed to make the Ukraine confess that Naftogaz deliberately stopped the supply to Donbass from February 18. The EC’s statement says only that "the parties recognized that the issue of the gas supply to certain areas of the Donetsk and Lugansk regions is extremely difficult in the legal, technical and political terms". Thus, in practice, Gazprom will continue to supply gas to the Donetsk and Lugansk People’s Republics without guarantees of payment, on uncertain conditions and for an indefinite period. According to Mr. Novak, as of early March, Gazprom has already supplied 100 million cubic meters of gas to Donbas, which at the current price for the Ukraine is about $33 million.