Russia’s monopolist gas company Gazprom is obviously alarmed by Ukraine’s statement to the effect that it will pump Russia’s gas to its underground storage facilities (USF) to meet its ends, no one else’s. Gazprom CEO Aleksei Miller accused Ukraine of lagging behind filling its USF with Russia’s gas, that this will threaten the EU countries next winter. While in Kuala Lumpur, obviously wishing to shift the blame, Miller said on Monday that the Naftohaz Ukrainy loan issue would be revised: “We understand that Naftohaz will have finance resources to fill their underground storage facilities. A solution to this problem can be found. We could make advance payments to Naftohaz, in terms of gas transit costs, something like two billion dollars, so they could pump enough gas to their storage facilities… I believe we will reach an understanding in the next couple of days.” Miller added that this advance payment would close the USF issue.
Naftohaz Ukrainy has 13 underground storage facilities that can store some 32 billion cubic meters of gas. Ukraine can supply up to 15 million cubic meters of gas to Europe’s distribution companies. Miller has a dim view of this option. Gazprom will make every effort to bar European companies’ access to Ukraine’s USF, considering that Moscow currently regards them as its property.
Miller knows that official Kyiv doesn’t want to pump gas into its storage facilities above the amount it actually needs, especially as a handout from Moscow, as a way of revising the unfair 2009 contracts. He made it absolutely clear (sparing protocol verbiage) that Gazprom will not accept any gas supply cost cuts or any amendments to the transit agreements, even if Ukraine stamps its foot on the USF floor.
Yurii Boiko, Minister of Energy and Coal Industry of Ukraine, declared toward the end of May that Ukraine would help Europe survive gas shortages from Russia at the peak consumption levels: “If Europe persists with its policy of pumping gas to Ukraine’s storage facilities in summer, then pumping it back in winter, then we will have an effective way of avoiding gas shortage supplies from Russia.”
The Day asked for expert comment on the Ukrainian minister’s statement, particularly whether official Kyiv asked Miller for a loan for Naftohaz.
Oleksandr NARBUT, independent energy expert:
“Ukraine has assumed responsibilities within the framework of the Energy Community. This means that Ukraine can broach the subject, lowering Russia’s gas transportation costs in view of Ukraine’s gas storage facilities. All this is proof enough to be submitted to the Arbitration Institute of the Stockholm Chamber of Commerce. Naftohaz is offered two billion dollars worth of loan for a project still to be carried out (what with this company’s twisted debt obligations). Remarkably, this loan has nothing to do with Ukraine’s underground storage facilities, contrary to Yurii Boiko’s statement. The man referred to the framework agreement with RWE (Germany). Under this agreement Ukraine will have to buy gas from RWE – in which case Minister Yurii Boiko will have to reveal the finance sources and explain exactly how the pipeline can work in reverse mode. He will further have to explain his running with the hare and hunting with the hounds. Has he made a deal with Gazprom? What about Gazprom’s loan worth two billion dollars? If Boiko is clean, he should publicly refuse Gazprom’s loan.”
