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European Union (EU), the politico-economic bloc comprising 28 European states, stated that its top priority is Russia’s continued transportation of gas through Ukraine in the future despite the shredded relations between the two ex-Soviet countries.

The odds of striking a new deal and reaching upon consensus upon the tariff rates and other conditions are dismal even with the arbitration and mediation offered by the European Union

The bloc that covers most of the continent is reliant upon Russia for nearly third of its gas supplies, a half of which is transited through Ukraine. As per Maros Sefcovic, the European Commission vice president for energy, “I have to underline that continuation of the important gas transit through Ukraine in (the) post-2019 period is a top priority for the European Union.” He gave this statement at the 14th annual Yalta European Strategy Annual (YES) conference in Kyiv on Friday.

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The current transit is being carried out under the contract between the Ukrainian state oil and gas company and the Russian gas giant Gazprom which is going to expire on December 31st, 2019. The recent statement has been issued in view of the post-2020 scenario.

The tensions between the two countries rose in 2014 in the backdrop of Ukrainian political crisis and Russian support to the insurgency, annexation of Crimea

The Russian company, Gazprom has already reduced the gas volumes that are to be transported through Ukraine and has expressed to further reduce the level by diversifying its pipelines. The same case is with Ukraine which also aims to diversify its transit pipelines, given that this is the major contributor to the Ukraine economy.

The relations between the two companies were battered by the deteriorating relations between their states and several negotiations made the contract to work this far. The European Union has promised its full support in promoting Ukraine’s role in transit and energy sector and facilitate the negotiations process for the post-2020 deal between Russia and Ukraine.

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The Russian company, Gazprom has already reduced the gas volumes that are to be transported through Ukraine and has expressed to further reduce the level by diversifying its pipelines

The Ukrainian state energy firm, Naftogaz had shown willingness to attend talks with the Russian gas giant, Gazprom if the talks were held outside Russia. Gazprom also expressed assent, however, further details were not decided upon. Moreover, bargaining has been going on between the two countries. Kiev has demanded higher tariff for transit fee charged to Russia.

Nevertheless, Kiev has been striving to wean itself off reliance on Russia in terms of energy supplies, given the bitter relations between the two countries. The tensions between the two countries rose in 2014 in the backdrop of Ukrainian political crisis and Russian support to the insurgency, annexation of Crimea, and the deteriorating Russia-Europe relations. However, the gas disputes between the two states are much older.

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The bloc that covers most of the continent is reliant on Russia for near third of its gas supplies, a half of which is transited through Ukraine

Numerous gas disputes occurred between Moscow and Kiev in the past years and both countries are trying to reduce their reliance on each other in terms of gas supplies and transit. Given the vicissitudes in relations between the two countries, the odds of striking a new deal and reaching consensus on the tariff rates and other conditions are dismal even with the arbitration and mediation offered by the European Union in this regard. Also, the goals of the two countries to diversify their supplies and transit is not going to help in the signing of new deal.

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