Copyright © 2021

The work of Euromaidan Press is supported by the International Renaissance Foundation

When referencing our materials, please include an active hyperlink to the Euromaidan Press material and a maximum 500-character extract of the story. To reprint anything longer, written permission must be acquired from [email protected].

Privacy and Cookie Policies.

“Naftogaz” prepares for “big reversal” 

European gas will cost Ukraine as much as Russian gas

On Saturday, August 16, test reversal gas supplies from Slovakia began using the “Voyany-Uzhgorod” pipeline. They are coordinated by “Ukrtransgaz,” the operator of the Ukrainian gas transportation system, and Slovakian Eustream, which is in charge of gas pipeline on its territory.

The organization of gas reversal, the supply of gas from the West to the East, is essentially a renewal of the initial Ukrainian gas transportation system exploitation plan. The pipeline was used for this until the mid-1970’s. Back then Moscow, Minsk, Vilnius and Riga consumed Ukrainian gas (Ukraine at the time was the USSR region for gas export). The same technical feature was used during the “gas war” in the winter of 2009, when “Gazprom” suspended its supplies, and it was necessary to transport gas from underground gas reservoirs in Western Ukraine to the Eastern regions.

At the end of April of the current year, “Ukrtransgaz” and Eustream signed a memorandum of mutual understanding regarding the provision of reverse gas supplies to Ukraine, and now the sides are preparing to execute commercial agreements.

It is expected that by the end of autumn, the European counteragents to national joint-stock company “Naftogaz Ukraine” will be determined, together with the conditions for gas supplies to Ukrainian consumers from EU territory starting September. About two dozen European suppliers have already expressed interests in supplying gas to Ukraine from Slovakia, Eustream claims.

Taking the tendencies of the gas market into account, the price conditions of such cooperation in the fall-winter period may turn out to be close to those offered to Ukraine by Russian “Gazprom” – about $480 per thousand cubic meters. There were instances when in peak periods of winter cold, gas prices on European spot markets reached $500 per thousand cubic meters. However, weather allowing, as well as in the fall, the price of gas at EU hubs may be lower than $400 per thousand cubic meters.

Agreements between “Ukrtransgaz” and Eustream prescribe two options for cooperation. According to the first, dubbed “small reversal,” supplies from Slovakia to Ukraine will reach about 22 million cubic meters of gas per day (about 8 billion per year) starting September of the current year. The second option, “big reversal,” prescribes certain consultations and additional agreements with “Gazprom’s” involvement. Thanks to this, the volume of reverse gas supplies to Ukraine may increase to 30 billion cubic meters per year.

Besides Slovakia, gas supplies to the Ukrainian market may be broadened from Hungarian and Polish territory, which transported about 2 billion cubic meters of gas purchased at European markets within the framework of the “Naftogaz” contract with German company RWE, to Ukraine.

We can help Ukraine become less dependent on Russia,” stated EU Commissioner for Fuel Gunther Ettinger, when commenting on the future of gas reversal from the EU. But this idea obviously does not sit well with the Russian monopoly, and they threaten to decrease their supplies to the European parters who will develop cooperation with “Naftogaz.”

The crisis in relations with “Gazprom,” which led to the suspension of the contract between the company and “Naftogaz” starting mid-June of the current year, also threatens a decrease of Russian transit through Ukrainian territory to EU countries. Therefore, for “Naftogaz” the problem of increase efficiency of the Ukrainian gas transportation infrastructure remains relevant.

The increase of reverse supplies from the territory of EU countries, as well as organization of the gas market based on Western Ukrainian underground reservoirs are the main elements of the solution examined by the national joint-stock company. Last week the Verkhovna Rada of Ukraine approved the government bill which allows to rent the gas transportation system and the underground reservoirs to western companies, however without the right to re-appropriation. In spring, the Ministry of Energy directed its proposals regarding joint usage of the gas transportation system to EU and US companies, and now “Naftogaz” is preparing for official meetings which will decide the fate of the Ukrainian pipeline.

Its part in European supplies of Russian gas in the short-term perspective remains quite pertinent. Not only because “Gazprom” uses it to carry out its contracts with consumers in Poland, Slovakia, Hungary and the Balkans, who have no reliable alternative for Russian gas as of yet.

Besides, Ukrainian underground reservoirs provide “Gazprom” with the stable execution of export contracts during high-demand periods among European consumers: their power allows to operatively satisfy significant orders. “Gazprom’s” bypass pipelines have no such ability. Therefore the European Union intends to employ assertive measures to ensure the security of Russian gas transit through Ukrainian territory.

Source: Forbes

Translated by Mariya Shcherbinina

You could close this page. Or you could join our community and help us produce more materials like this.  We keep our reporting open and accessible to everyone because we believe in the power of free information. This is why our small, cost-effective team depends on the support of readers like you to bring deliver timely news, quality analysis, and on-the-ground reports about Russia's war against Ukraine and Ukraine's struggle to build a democratic society. A little bit goes a long way: for as little as the cost of one cup of coffee a month, you can help build bridges between Ukraine and the rest of the world, plus become a co-creator and vote for topics we should cover next. Become a patron or see other ways to support. Become a Patron!
Related Posts

March 10: Pro-Russian collaborators have managed to create 3 “powerful tactical groups.

Le 10 mars – "Lors des dernières 24 heures, neuf soldats ont été blessés dans la zone de l'opération antiterroriste, aucune perte." – le porte-parole de l'ATO, Andriy Lyssenko.

Le 10 mars – Pendant la "trêve", les forces militaires russes et les collaborateurs pro-russes ont réussi à créer des "groupes tactiques de choc" dans les régions suivantes:

le Nord – en direction de Donetsk,

la zone côtière – en direction de Marioupol,

Louhansk – en direction du nord de la région.

En fait, ils ont réussi à créer une armée à partir de groupes criminels disparates.

Le 10 mars – Les analystes américains du Bureau Strafor estiment que la Russie peut continuer à soutenir les terroristes du Donbass et occuper toute la rive gauche de l'Ukraine.

Le 10 mars – "Le Tribunal international de La Haye pourrait etudier "la question de la Crimée", alors que toutes les différences entre la Russie et l'UE devraient être traitées en vertu du droit international." – déclaration du ministre des Affaires étrangères d'Espagne, Jose Manuel Garcia-Margallo lors d'une conférence de presse après sa rencontre avec le ministre des Affaires étrangères de la Federation de Russie, Sergueï Lavrov.

Le 10 mars – "Les militants terroristes continuent à détruire systématiquement le Donbass. Près du village d'Orikhove (district de Popasna, région de Louhansk), des inconnus ont fait sauter un pont de chemin de fer." – le porte-parole de l'ATO, Andriy Lyssenko.

Le 10 mars – Le ministre des Affaires étrangères d'Ukraine, Pavlo Klimkin a déclaré que les militants terroristes ne permettent pas à l'OSCE de surveiller le processus du retrait de leurs armes lourdes.

Le 10 mars – Le dollar est tombé à 21,7 hryvnias ukrainiennes.

Le 10 mars – Lors d'une conversation téléphonique avec le président français, François Hollande, le président de l'Ukraine, Petro Porochenko a déclaré qu'il n'y avait aucun progrès en ce qui concerne les négociations sur la libération de tous les otages, y compris Nadia Savtchenko.

P.S.: Faîtes circuler cet appel, SVP!