Thursday, December 23, 2021
Land loses a lot of money
Ukraine: Own gas transit network is an alternative
With the start of Nord Stream 2, Russia would in future be directing gas directly to the EU. The loss of transit fees would cause massive damage to Ukraine, which is why the country extols the reliability of its own network. Without the gas from Russia, there may be only two options in the end.
Ukraine sees its own gas transit network as an important alternative to the previously unapproved Nord Stream 2 Baltic Sea pipeline from Russia to Germany. “In the entire history of the Ukrainian transit it never happened that it failed because of any technical problems on the Ukrainian side,” said the head of the operating company of the Ukrainian gas transport system, Serhiy Makohon. The two interruptions in 2006 and 2009 were made exclusively for political reasons on the part of Russia.
Nord Stream 2 is supposed to bring gas from Russia to Germany bypassing Ukraine. The Baltic Sea pipeline is completed but not yet operational. The financially weak Ukraine is urgently dependent on the billions in revenue from the transit fees for gas transit and now fears high losses.
The Russian energy giant Gazprom is fulfilling the contract that will run until the end of 2024 with currently 40 billion cubic meters of transit per year, said Makohon. But that’s 30 percent less than last year and 45 percent less than 2019. Within these two years, the state of the system has hardly deteriorated. “We are ready to transport an additional 100 billion cubic meters of natural gas per year (to the EU).”
However, if Russia should stop its transit through the neighboring country, Ukraine would either have to quintuple its tariffs or align the gas transport system completely to the domestic market, said the head of the state-owned company. “We have expenses and we cannot cover them at the expense of Ukrainian consumers.” Therefore, the company is considering shutting down part of the system, including compressor stations, in the worst case.