Revenue from Russian gas transit via Ukraine significantly exceeds spending – Naftogaz

Executive Director of NJSC Naftogaz of Ukraine Yuriy Vitrenko says guaranteed revenue from the transit of Russian gas via Ukraine under the new contract significantly exceeds spending.

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"Guaranteed revenue from [gas] transit significantly exceeds (marginal) transit spending, i.e. Ukraine will benefit from this, rather than lose. Those who say that the transit with such volumes [of gas] will be unprofitable, most likely, do not understand the gas transmission economics, or just are willing to criticize [the deal]," he wrote on Facebook on January 2.

Vitrenko says the gas transit fee specified in the contract with Gazprom is confidential information. However, given the total guaranteed capacity (65 billion cubic meters/bcm in 2020 and 40 bcm in the next four years, i.e. 225 bcm over five years), Gazprom will pay at least US$32 per 1,000 cubic meters of pre-booked capacity.

According to Vitrenko, if the Nord Stream 2 gas pipeline is not completed, while Ukraine confirms the reliability of gas transit in line with European rules, gas transit volumes will be greater.

As UNIAN reported earlier, on December 30, Ukraine and Russia signed a new gas transit contract for a period of five years, obliging Russia's Gazprom to pump a minimum of 65 bcm of gas via Ukraine in the first year and 40 bcm in the next four years.

On December 31, Naftogaz CEO Andriy Kobolyev said Ukraine would get at least US$7.2 billion from Russian gas transit over the next five years.