Image courtesy of Gazprom.

As winter approaches, Ukraine and Russia headed back to the negotiation table in Moscow Friday to try and strike a deal that would resolve a debt dispute between the two countries and resume gas shipments to Ukraine.

In June, Russia’s Gazprom stopped all gas shipments to the Ukraine over an unpaid $5 billion debt.

Russia filed a $4.5 billion lawsuit against Ukraine’s state owned Naftogaz in a Stockholm arbitration court.

Naftogaz filed a $6 billion countersuit against Gazprom alleging that the company has not reviewed its pricing in accordance with a price review process established by the companies in 2011, Ukraine news agency Interfax said.

The dispute will be heard by an arbitration judge. A hearing date has not been set yet.

EU officials are suggesting an interim agreement that could possibly resume Russian gas exports to Ukraine until the lawsuits are resolved.

Gazprom said its position is unchanged and that Ukraine must settle the debt before gas shipments can resume, Russian news agency ITAR TASS said.

Previous talks to settle the dispute failed.

The EU and Ukraine have said they are open to a seasonally adjusted pricing scheme. Ukraine has rejected similar proposals in the past.

Despite the dispute, Russian companies still use pipelines that run through Ukraine to export gas into Europe.

The majority of Russian gas headed for the EU passes through Ukrainian pipelines.

Russian gas accounts for nearly a quarter of the EU’s gas supply. About half of that supply travels through pipelines in Ukraine.

Ukraine is currently purchasing Russian gas exported to Poland, Hungry and other EU countries through “reverse flow” shipments.

However, as EU countries build up their gas supplies ahead of winter reverse-flow shipments to Ukraine have slowed significantly.

Earlier this month, Poland stopped its gas shipments to Ukraine.

On Thursday, Hungry’s pipeline operator FGSZ indefinitely suspended gas deliveries to Ukraine citing technical work it needed to perform to “manage the security supply” as demand spikes.

In 2013, Ukraine imported nearly 26 billion cubic meters of gas from Russia, over half of its annual supply.


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