Problem issues of Ukraine’s gas transit. ( theses of the report on international conference « Ukraine ’ s oil and gas industry : reliability , stability and perspectives »). L. Unigovskyy.
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(theses of the report on international conference«Ukraine’s oil and gas industry: reliability, stability and perspectives»)
It is very important therefore to estimate the usage of its capacities for gas transit to Europe in middle- and long-term perspective.
The basis for such analysis are documents of European research centers, EU official papers, Gazprom documents as well as experts assessments concerning Eurasian and neighboring markets of gas production and supply.
Before analysis we would like to formulate important principles which determine gas transit to European Union.
Hydrocarbons supply in large volumes will always contain political component and will be related to political interests. That is why the term "petropolicy” is being used.
European countries are interested in diversifying not only sources of supply, but also gas transport routes into EU.
European consumers value reliability of supplies even more than its cost in reasonable amount.
Every new conflict between Russia and Ukraine harming reliability of gas transit decreases Ukraine’s chances to stay almost monopoly gas transit route no matter which party is guilty.
The estimate of utilized capacity of Ukraine’s gas transport system in middle- and long-term perspective depends on Russian gas import into EU as well as on gas demand in Europe.
Figure 1 shows different prognoses of gas import volumes into Europe.
by the leading energy agencies, scientific centers and consulting companies
by alternative price scenario
This situation not only heightens competition between transit routes, but also let resource producer maneuver for changing routes. For example, according to estimate of Slovakian gas transport company «Preprava» the construction of Yamal-Europe gas pipeline led to the loss of 18 bcm gas transit for Slovakia annually during 5 years.
We also underline that planned (by RWE) GAZZELE pipeline construction (fig. 3) will increase transit routes competition because of gas transportation to central and southern Europe by Nord Stream.
Source:RWE Transgas Net
Fig. 3 GAZELLE gas pipeline as Nord Stream extension to Check Republic
Creation of joint-stock
Creation of multilateral
Ukraine’s gas transport system(transit component)
Fig. 4 Possible ways for development of Ukraine’s gas transport system
1. Evaluate the volumes of gas transit through the territory of Ukraine in long term perspective and economic indicators of Ukraine’s gas transport system for the option of conservation of existing management system.
2. The same for the options of consortium and joint-stock company.
3. Determine the reasons for using “gold share” for the options of consortium and joint-stock company.
4. Determine the possible members of consortium (or shareholders).
5. Analyze possible judicial, economical and management basis for creation of consortium (or joint-stock company).
6. Evaluate the sources of investments.
7. Compare options.
The conclusions should be based on middle- or long-term forecasts and options analysis but not on the current situation analysis.
In case of consortium's creation, it should be multilateral. As transit country Ukraine is interested in its competitors participation - Belarus, as well as in participation of supplying countries, financial institutions, Gazprom.
Consortium is becoming reasonable way of development in case of some transit volumes guarantees only. Besides the gold share's mechanism will guarantee the state influence on key aspects of consortium activities.
5. In spite of all well known disadvantages of Ukraine’s gas transport system Russia will need its capacities to fulfill its European contract commitments. But Russian dependence on Ukraine’s transit route will decrease.
6. In case of Russian gas export escalation the decrease of transit volumes through Ukraine will be gradual. It will depend on speed of alternative routes construction, mainly Nord Stream as well as Ukraine’s strategy towards Russian gas transit to Europe.
7. Almost the worst situation may arise in case of simultaneous construction of Nord Stream and Yamal-Europe second stage on the background of stabilization of Russian export volumes. It will inevitably lead to major transit decrease through Ukraine. Exactly this situation may be forecasted by the year 2020. In this connection the construction of GAZELLE gas pipeline may play very negative role for Ukraine as it will divert surplus gas volumes from the north of Germany to south, to central Europe – to Check Republic.