Ukraine to Offer Gazprom Discounted Transit Fees

Ukraine will offer Gazprom discounted fees for natural gas transit to ensure a flow from Russia to Europe after 2020, European Commission Vice President for Energy Union Maros Sefcovic said on Friday.

Russia's Gazprom and five European companies, with German backing, plan to build the North Stream 2 gas pipeline on the Baltic seabed to connect Russia directly with Germany, bypassing eastern Europe and limiting the flows via Ukraine.

The pipeline will double Russia's gas export capacity to Germany but threatens to cost Ukraine valuable revenues, while increasing European Union reliance on Russian gas.

"Ukraine is saying they want to maintain the transit of Russian natural gas to Europe and will seek solutions that would guarantee the higher the volume the cheaper for Gazprom," Sefcovic told Reuters at the Globsec security forum.

The volume of transit would have to be "commercially viable" for Ukraine, Sefcovic added.

According to energy firm Naftogaz's expectations, Ukraine will earn around $3 billion from transit in 2018.

Russian President Vladimir Putin said on Friday after meeting with German Chancellor Angela Merkel that Moscow was ready for talks with Ukraine on continued gas transit through the country.

(Reporting by Tatiana Jancarikova Editing by Alexander Smith)