“We have always regarded Ukraine as a transit country, forgetting that it is one of the largest consumers of Russian gas,” Aleksandr Pasechnik, head of the analytical directorate of the Russian National Energy Security Fund, said later last week. He also noted that this country is a vast market for Gazprom: Ukraine accounts for 15 and more percent of the gas it exports. “It is an important market for us, and it would be wrong to lose it. But this seems to be imminent,” he added.
Pasechnik also pointed out that Ukraine had chosen to be no longer dependent on Russian gas. The expert does think it is a tragedy because he is sure it is impossible to achieve this goal quickly. “Practice shows that, if you take an integrative approach, you will see that things are not so bad. It is, of course, bad for Russia that they [Ukrainians] have some ways of diversification,” Pasechnik says and mentions the resources Ukraine can tap to get rid of energy dependence, such as China Development Bank loans, projects to replace natural gas with coal, natural gas liquefaction projects at the Odesa terminal, and extraction of gason the Black Sea shelf.
Yet the Russian expert said nothing about Ukraine’s intention to begin shale gas production in cooperation with Shell and Chevron. He must have also forgotten about the possibility of pumping gas from Europe by using some segments of the Ukrainian gas transportation system in the reverse mode. “All these projects allow the country to reduce its dependency on Russian gas supplies,” Pasechnik says. He is also right to say that “one of Ukraine’s ultimate goals is to increase its own productions many times over by 2030, which will allow reducing the import of gas.”
The expert notes that, as a result, Russia will obviously suffer losses – all the more so that political initiatives about gas cooperation between Moscow and Kyiv are deeply frozen. “We can see no tendencies towards progress, but there is a shimmer of hope that some compromises will be found,” Pasechnik says. “There will be parliamentary elections in Ukraine in the fall. After them, the two sides will perhaps resume negotiating new measures that concern Gazprom and Nafrohaz and will agree on “what kind of price policy to pursue and how to develop transit cooperation – in other words, how Ukraine can still pump some gas, taking into account that Russia is speeding up the construction of bypass mainlines.”
But no sooner had the “gas dove” announced the good news about the likely agreements than it lost all its feathers and remained stark naked, i.e., a dyed-in-the-wool Russian “patriot” in the worst meaning of the words. “The autumn-winter season is coming up. Russia is now unable to drop the Ukrainian gas transportation system, for it cannot ensure a full-scale transit of gas to Europe without the latter,” he says in a neutral tone but then to burst into an open aggression: “So we must go on working until we build all the bypass pipelines.” Let me add for those who are not in the picture: Ukraine will lose all its gas transportation capability and its role as Europe’s main gas transit country.
Therefore, our intention to take gas from Europe is not a whim at all. But the word “reverse” is customarily looked upon in Ukraine as something dangerous. This interpretation of the term dates back to the times when oil ran through the Odesa-Brody oil pipeline in the reverse direction, much to the satisfaction of Russian oil producers. But times are changing. Ukraine is now preparing and even, as Ukrtranshaz chief engineer Oleh Mykhalevych said last week, technically ready for receiving 5 billion cubic meters of gas from Europe in the reverse mode. In his words, “we have already made it possible to receive reverse-mode supplies.” Mykhalevych believes that reverse-mode deliveries of gas to Ukraine can be increased to an annual 20 billion cubic meters even without additional capital investments.
Yet it is too early to say that this problem has been solved finally or at least politically. It will be recalled that Prime Minister Mykola Azarov said that Ukraine might as well buy Russian gas from the German company RWE if gas price negotiations with Russia came to no avail. By all accounts, the decision must not be further delayed.
Here is what independent energy expert Oleksandr Narbut told The Day on this point: “I attended this conference and heard Mykhalevych. He said nothing about five billion. He said the Ukrainian gas transportation system (GTS) had some free capacities which he thinks allow pumping 40 billion cubic meters of gas. (In my view, these capacities are much larger and exceed 50 billion if we take into account that the Ukrainian GTS will pump not more than 92-93 billion cubic meters this year, as it did in 1992. And it is an unprecedentedly low figure. I will remind you that Ukraine’s Fuel and Energy Minister Yurii Boiko said that the transit of at least 110 billion was guaranteed.) As for the real technical possibilities of pumping gas from Europe to Ukraine, my information says that Ukraine can receive an annual 10 to 12 billion cubic meters of gas from three – Slovak, Polish, and Hungarian – directions. And the problem is not in Ukraine’s technical possibilities but in the cross-border obstacles (sometimes it is just a slide valve that should be opened). I think the point is that the Slovaks would just like to build a new station and take money for this purpose from the European Union or other investors. But this will take time, and the question is whether or not it is a political game in favor of Gazprom. For we have a measuring station there. All we have to do is draw up and approve a schedule of measurements. Besides, the neighboring countries’ regulatory bodies should make an effort to synchronize the conditions and the work of technical and supervisory services. If the two sides show a political will, they could do this before the end of this year or even much earlier if they were doing, not simulating, this work.”
