The state of play of EU-Russia energy relations

Brussels, 24 March 2015

Maroš Šefčovič - Vice-President for Energy Union

Ladies and gentlemen,

Your work as member of the European Parliament's Delegation to the EU-Russia Parliamentary Cooperation Committee has never been more important. The ongoing conflict in the East of Ukraine has created a devastating humanitarian crisis, affecting millions of civilians, besides leading to major political and diplomatic crisis. But it also has direct impact on the EU's energy security and economy at large.

EU-Russia interdependence in the field of energy will remain for the foreseeable future. It is set to decrease as both the EU and Russia seek to diversify their energy trade, yet, this will not happen overnight. Furthermore: while the security of gas supply dominates today's discussions, EU energy relations with Russia are not limited to gas. EU-Russia energy trade includes coal, oil and oil products, nuclear materials. Russia is also a key player in the nuclear sector, supplying nuclear materials, technology and services to a number of Member States.

The EU-Russia Energy Dialogue which was set up in 2000 has been largely put on hold as a result of the Russia-Ukraine crisis. Its gradual, selective and conditional re-launch could be considered provided the overall geopolitical situation linked to Ukraine allows, that is - if and when the Minsk Declaration of 12 February is duly implemented, as I will explain in a few minutes.

Despite the difficulties we are going through in our relations with Russia, we need to find a modus vivendi since we are too interdependent to live in isolation. A first step in the right direction would be constructive engagement with Ukraine; in this respect, energy has a key role to play as a confidence building measure to the resolution of the Ukraine crisis. For the foreseeable future gas transit from Russia through Ukraine will remain crucial for our energy supply. We therefore need to work together with both Russia and Ukraine to ensure the flow of natural gas remains uninterrupted.

With respect to the current gas dispute between the Russian Federation and Ukraine:

The Commission welcomes the Minsk Agreement of 12 February, which has given a political mandate to pursue the trilateral gas talks. We remain confident that the trilateral gas talks we have resumed just this past Friday will bring us closer towards finding lasting, sustainable solutions. Let me explain how.

The Winter Package agreed on 30 October 2014 is an interim gas supply arrangement between Ukraine and Russia. Up until 18 February, this Package was respected. At that point, supplies to certain areas of Donetsk and Luhansk controlled by the separatists were interrupted.

On 2 March, I facilitated trilateral negotiations with the Russian and Ukrainian Energy Ministers Novak and Demchyshyn on the implementation of the Winter Package. From the outset it was clear that these negotiations would not be easy. As you may recall, for 2 weeks the parties had been exchanging accusations over the lack of implementation of the Winter Package.

My objective for these negotiations was threefold:

Firstly, to have both parties reaffirm their full commitment to implement the Winter Package by the end in March. The focus was therefore not on determining blame, but overcoming the disagreements.

Secondly, to separate the issue of the gas supplies to certain areas of Donetsk and Luhansk. This is clearly a very complex issue as not all facts are transparent. It was clear from the outset that this aspect went far beyond the Winter Package agreement and therefore required a separate treatment.

Thirdly, to have both parties commit to subsequent trilateral negotiations on the follow-up of the Winter Package.

I am very glad to report to you that all three objectives were successfully attained. I do not believe a more comprehensive breakthrough would have been possible, given the current geo-political context. The determinant aspect for me was that both parties have reconfirmed their commitment to the full implementation of the Winter Package.

Given the success of these objectives, and in line with the call of the leaders of Germany, France, Russia, and Ukraine in support of the Minsk Agreement of 12 February – I was able to meet again with the two ministers last Friday, here in Brussels, to discuss the follow up agreement.

As you know, we succeeded in issuing a joint press statement at the end of the day, recognising that preparations for the supply for the next winter should start as soon as possible. To this effect, a group of experts will present a draft proposal for the next trilateral meeting, foreseen to be held in April 2015.Talks should focus notably on the gas price, amount of purchased natural gas and financing issues - until the Stockholm Arbitration Tribunal settles the disputed issues.

European Commission

See more: http://europa.eu/rapid/press-release_SPEECH-15-4709_en.htm