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Ukraine and Russia Fail to Reach Gas Deal for Europe, Agree to Meet Again

Russian Energy Minister Alexander Novak. kremlin.ru

Russia and Ukraine failed to reach a new gas transit deal on Thursday, but said talks were "constructive" and they would meet again to try to find an agreement before the current one ends.

There are a number of obstacles to a deal, such as a political row between Kiev and Moscow, a pro-Russian insurgency in eastern Ukraine, and litigation between Russian gas supplier Gazprom and Ukraine energy company Naftogaz.

Ukrainian Energy Minister Oleksiy Orzhel said there was still a risk Russian gas deliveries could be interrupted and Kiev would make the necessary preparations to ensure continued supply in such a scenario.

The Russia-Ukraine gas transit agreement expires in January. Ukrainian energy authorities are worried Moscow could stop gas supplies through Ukraine, leaving some parts of the country without gas in winter. Moscow is building new pipelines to Europe, such as Nord Stream-2 and TurkStream, to bypass Ukraine, a main route of the Russian gas to Europe.

Last year, Kremlin-controlled gas giant Gazprom supplied Europe with more than 200 billion cubic meters of gas, of which 87 went through Ukraine, providing Kiev with valuable transit income.

Orzhel said Gazprom was seeking lower transit tariffs, which was possible if Moscow agreed to higher volumes.

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