Russia, Ukraine reach five-year gas-transit deal:
By RFE/RL
Russia and Ukraine have signed a five-year, $7 billion deal on the transit of Russian natural gas to Europe following intense negotiations ahead of a year-end deadline.
The deal, negotiated in Vienna, was confirmed by the respective Russian and Ukrainian state gas companies, as well as Ukrainian President Volodymyr Zelenskiy in a social-media post on December 30.
The current agreement was set to expire on December 31, risking Europe's vital link to billions of cubic meters in gas from Russia via Ukrainian pipelines in the depths of winter.
About 40 percent of the 200 billion cubic meters (bcm) of gas that Russia has sent to Europe annually has been transmitted via Ukraine's vast network of pipelines.
Energy relations between the two neighboring countries are part of bigger geopolitical tussle involving military occupation -- Russia invaded and annexed Ukraine's Crimean Peninsula in 2014 and has backed separatists in the eastern part of the country -- alleged cyberwarfare, propaganda, and international lawsuits on human rights abuses and misappropriated assets.
Russian Prime Minister Dmitry Medvedev described the deal as "a compromise that had to be reached" in comments posted on his VKontakte page on December 31.
"The signing of these documents indicates that it is possible to discuss and reach an understanding even on the most difficult issues," he added.
'Pump Or Pay'
Under the new contract, Kyiv next year is expecting to ship a minimum of 65 bcm, or about 22 bcm less than it did in 2018. Minimum volumes will decrease further to 40 bcm in 2021-24.
The new deal has a "pump or pay" clause, meaning Russia must pay the minimum gas-transit fee even if it doesn't pump the contracted volumes through Ukraine, said Yuriy Vitrenko, executive director of Ukrainian state-run Naftogaz, on Facebook.
Russian state Gazprom CEO Aleksei Miller described the set of agreements as a "big package deal that restored the balance of interests between the parties."
Additionally, according to Vitrenko, transit fees for additional volumes beyond the minimum amount "would substantially increase."
Russia has twice cut off gas supplies to Ukraine -- in 2006 and 2009, leaving households and businesses there and in countries farther west out in the cold.
But as Russia has moved closer to completing a second underwater gas pipeline project to feed Germany, known as Nord Stream 2, Ukraine's role as a vital gas-transit country for Europe has been imperiled.
Russia has 10 percent left to complete the 2,460-kilometer pipeline project, which would in effect dispose of Ukraine's transmission network.
However, U.S. sanctions earlier in December forced underwater pipe-laying work to stop because they target companies involved in the project, the main one of which is a Swiss-Dutch company.
As a result, completion of Nord Stream 2 could stretch to 2023 or beyond, Aleksei Rakhmanov, president of Russia's United Shipbuilding Corporation, said on December 24. It would take Russia two years to design the ships needed for the project, and even more to build, he said.
Some Legal Disputes Settled, But Not All
The new deal, according to Zelenskiy, stipulates that "both sides reserve the right to extend the contract for another 10 years" after its expiration.
Also part of the new contract is Russia agreeing to pay $2.9 billion to Ukraine as part of a Stockholm arbitration court ruling, which Moscow did on December 27.
In turn, Naftogaz has promised to release seized assets belonging to Gazprom in Europe and both parties have agreed to drop reciprocal court claims that haven't concluded and sign an out-of-court settlement.
However, lawsuits on a state level, particularly Naftogaz's claims against Russia for seizing the company’s assets during its annexation of Ukraine's Crimean Peninsula, aren't affected by the new transit contract.
On December 21, Gazprom and Naftogaz said that they had reached a preliminary agreement on the new deal to ship Russian gas through Ukraine's pipelines.
But technical and other talks on specifics continued until the announcement of the signing.
Pompeo to make first Ukraine visit as impeachment in U.S. buffets relations:
By Todd Prince
Secretary of State Mike Pompeo will travel to Ukraine this week for the first time as the United States' top diplomat with an acrimonious impeachment process under way in Washington that revolves in part around White House actions toward Kyiv.
Pompeo will arrive in the Ukrainian capital on January 3 to meet with Ukrainian President Volodymyr Zelenskiy, Foreign Minister Vadym Prystayko, Defense Minister Andriy Zahorodnyuk, and business and civil-society leaders, a senior State Department official said on December 30.
He will depart the following day for Belarus as part of a five-day trip to four post-Soviet states in Europe and Central Asia and then Cyprus, a potential gas exporter to Europe.
But Pompeo's visit to Ukraine -- which lost control of Crimea to Russia in 2014 and is still fighting a five-year war against Russia-backed separatists -- is likely to attract much of the attention on both sides of the Atlantic.
President Donald Trump and his administration's actions toward Kyiv are at the center of a whistle-blower complaint and historic impeachment votes two weeks ago in the Democrat-controlled House of Representatives. They were based on indications that Trump pressured Zelenskiy in a July 25 phone call to do him "a favor" and investigate a political rival, Joe Biden, as well as a widely dismissed theory that Ukraine -- not Russia, as U.S. intelligence agencies have concluded -- interfered in the 2016 U.S. election. Critics claim crucial aid to Kyiv was withheld as leverage.
Pompeo, who is widely seen as supporting a tough approach toward Russia, has acknowledged listening in on the phone call.
The State Department said Pompeo will express firm U.S. support for Kyiv amid the ongoing conflict in eastern Ukraine and discuss key reforms, including judicial and anti-corruption measures, with Zelenskiy and other officials during his trip.
"The secretary's visit to Ukraine will seek to highlight our unshakable commitment to Ukraine's sovereignty and territorial integrity within its internationally recognized borders and reaffirms the importance of our strategic partnership with Ukraine," the senior State Department official said in a phone call on December 30.
The official declined to say whether Pompeo would raise the question of an investigation into Biden, who was vice president while his son sat on the board of a Ukrainian gas company.
Republican congressional leaders have sought to protect Trump's decision to withhold the military aid by describing Ukraine as an endemically corrupt state, while some of its members have said Ukraine could have interfered in the 2016 U.S. election.
The administration and the State Department have lost high-ranking officials overseeing Ukraine policy this year first as Trump and his personal lawyer, Rudy Giuliani, pushed for the investigations and then as their efforts became public, leading to the impeachment inquiry.
Pompeo will arrive one day after charge d'affaires to Ukraine William Taylor leaves his post, the second top U.S. diplomat to Kyiv to depart within a year following the abrupt recall of Ambassador Marie Yovanovitch in May amid public criticism from Trump allies about her performance.
Both Taylor and Yovanovitch testified in the House impeachment hearings and were critical of Trump's Ukraine policy.
U.S. and other Western sanctions and recent contracts to supply American military equipment, including Javelin anti-tank missiles, are key to Kyiv's efforts to repel the Russia-backed separatists who control swaths of eastern Ukraine.
Pompeo's visit is unlikely to result in any deals, said John Herbst, a former ambassador to Ukraine who is now an analyst at the Atlantic Council. Rather, he told RFE/RL, the secretary of state will likely seek to demonstrate that "everything is OK" between Washington and Kyiv.
U.S. policy toward Ukraine is "in large measure" back to normal, Herbst said. Congress earlier this month approved on a bipartisan basis giving $300 million in military support to Kyiv next year -- up from $250 million this year -- and passed sanctions that are already delaying work on a new Russian gas pipeline aimed at reducing transit through Ukraine.
However, the impeachment fight in the United States will continue to weight on the relationship, he said. The Senate could start its impeachment hearings next month.
Zelenskiy has said Ukraine's future lies in integrating into Euro-Atlantic organizations. But the European Union's members are divided on further enlargement and Ukraine likely needs to carry out significant reforms before it might be invited into that bloc or NATO.
The senior State Department official praised Zelenskiy for the steps the novice president has taken since coming to power in May to shake up Ukraine's government, improve the economy, and rein in oligarchs.
Zelenskiy has "undertaken a tremendous number of reform efforts" and has shown "real leadership," the senior official said. "There is an energy there [in Kyiv]; there is a dynamism."
Pompeo could raise the topic of the possible sale of Motor Sich, a highly respected Ukrainian manufacturer of aviation engines for the defense industry, to the Chinese, said Herbst.
U.S. officials have said they are concerned about Beijing getting its hands on that company's leading military technology.
This ends our live blogging for December 30. Be sure to check back tomorrow for our continuing coverage.