OREANDA-NEWS. The Ukrainian side acknowledges that the terms of supply of Russian gas offered by the Russian side could be viewed as a basis for an interim solution.

However, for this solution to work, Ukraine expects a comprehensive binding deal that will include both an addendum to the contract between Naftogaz and Gazprom signed by the companies' CEOs and a binding intergovernmental protocol between Russia, Ukraine and the EU signed by authorized representatives on behalf of the governments of Russia and Ukraine as well as the European Commission.

The discussed solution heavily depends on actions of the governments of both Ukraine and Russia, as well as of the EC.

In particular, the government of Ukraine should thereby commit to ensure gas transit to the EU in line with contractual obligations between Naftogaz and Gazprom. It should also commit to provide Naftogaz with sufficient funding to finance gas purchases.

For an efficient solution, a commitment of the European Commission is necessary to provide financial support to Ukraine to implement the deal.

Finally, the Russian government's commitment not to revoke the agreed discount based on customs duty revision till the end of 1Q 2016 is an essential prerequisite for the deal to hold.

Therefore, the signing of a trilateral binding protocol is essential to reach a working solution on the Russian gas supply terms for the upcoming winter.