22 October 2016

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Reuters: Ukraine may decommission part of gas network on lower Russian supplies

Ukraine may decommission part of its gas transit system due to a sharp fall in the amount of Russian gas being pumped to Europe via Ukraine, the head of Ukraine's gas transport monopoly Ihor Prokopiv was quoted on Tuesday as saying, according to Reuters.

Photo from UNIAN
The Ukrainian government was preparing for different supply scenarios / Photo from UNIAN

Around 40% of Russia's gas exports to Europe currently pass through Ukraine but several new gas pipelines elsewhere and an uncertain future for Ukrainian gas deals with Russia could leave Ukrainian transit pipelines redundant within a few years, Reuters wrote.

"Taking into account the considerable surplus capacity of Ukraine's gas transportation system, with 30% of its gas compressor stations in standby mode, it is obvious that the unused assets must be decommissioned," Prokopiv told NV Business magazine.

He said the government was preparing for different supply scenarios.

"We have a clear strategy for the next 10 years, according to which we will soon begin to optimize the gas transport system to make it ready for... zero, 30 and 70 billion cubic meters (bcm) of transit through the territory of Ukraine," he said.

He said Ukraine, which used to transport 110 bcm of Russian gas to Europe, had already lost around 40 bcm of transit after Russia's Gazprom launched the Nord Stream pipeline to Germany and boosted the transit capacity of the Belarussian gas system.

Ukrainian GTS meets requirements posed to world's leading companies – Ukrtransgaz"The Russians would like to completely discredit Ukraine. They wanted to launch another flow – the Nord Stream 2 and also bypass Ukraine in the southern direction, building a so-called South Stream. This is a threat to Ukraine," Prokopiv said.

Poland’s antimonopoly watchdog objects construction of Nord Stream 2He said Ukraine had already faced a significant surplus in its transit capacities, with around a third of its pumping stations standing idle.

Earlier this year Prokopiv said Russian gas supplies to Europe via Ukraine could slightly increase this year but added that the longer term outlook was for gas transit levels to decrease.

Relations between the two nations have suffered since Russia's annexation of Crimea in 2014. Ukraine has not bought gas directly from Russia since November 2015, importing instead from Europe.

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