The government of Ukraine is prepared to allow Norwegian companies to invest in the gas transportation system (GTS). According to Ukraine’s Prime Minister Arsenii Yatseniuk, the state intends to adopt more laws that will enable Statoil, a Norwegian gas transportation company, to take part in the bidding for managing the Ukrainian pipelines and underground gas storages.
“If Norwegian energy sector companies are prepared to invest in the Ukrainian gas transportation system, the government of Ukraine is prepared to move a special bill that will enable not only EU and US, but also Norwegian companies to directly invest in the Ukrainian GTS and has storages,” Yatseniuk said, addressing a Ukrainian-Norwegian forum.
This seems to be a good idea. The more wishers there are, the better will be the results of the project to set up a GTS management consortium. Yes, experts say, but the concrete case of a Norwegian company has a “but” which the Ukrainian government cannot help noticing. The details are in the following commentary by Yurii KOROLCHUK, member of the Supervisory Board, Institute of Energy Strategies:
“Premier Yatseniuk’s proposal that a Norwegian company take part in the GTS leasing is an act of despair. The despair is caused by the lack of real interest on the part of EU companies. The US is standing totally clear of this process, although it promised to help search for an investor.
“Tellingly, Ukraine is inviting Norway, a country that is not an EU member and requires the creation of new conditions, to take part in the leasing of the GTS. Actually, Yatseniuk, who does not represent now either the coalition or the majority in the new parliament, has readily promised [the creation of special conditions].
“At first glance, Norway looks attractive and promising from the viewpoint of the financial resources it has. But leasing the GTS is not interesting to Statoil either from the angle of benefits for its own business or from the angle of an attractive investment.
“Ukraine’s GTS cannot be used to transport gas from the North Sea shelf to Statoil’s customers in Western Europe.
“As a common financial investment, this option is not lucrative for Statoil because the GTS of Ukraine is already reducing the transit of Russian gas, which in turn cuts down its transit earnings, and needs at least 5 billion dollars to modernize.
“After all, Norway is facing the necessity to stop the fall of its gas and oil production, so the free funds will be channeled, above all, to this sector rather than for the purpose of leasing or buying Ukraine’s GTS.
“Finally, from the viewpoint of technological operation, Statoil mostly deals with 8,100-km-long shelf gas pipelines. At the same time, Ukraine’s GTS is more than 22,000 km of gas mains alone. Ukraine will reap no benefits from the Norwegian experience.
“But even if we assume that Norway leases the GTS of Ukraine, this will still raise a question: why is Statoil meddling in this? For, according to Naftohaz Ukrainy representative Yurii Vitrenko, 49 percent of Ukraine’s GTS will be put on sale in two or three years’ time. There is no sense for Statoil to deal with Ukraine’s GTS problems for a couple of years in the capacity of a leaseholder if an altogether different company will be the buyer.
“I hope there are no adventurers in the government and Naftohaz, who will lead Ukraine’s GTS into a dead end. And, to begin with, they should decide whether they will take the GTS of Ukraine down the road of leasing or selling.
“In the long term and from a strategic angle, Ukraine’s GTS is a direct rival to Norway, for it transports to the EU the Russian gas that competes with that of Norway in Europe.
“Moreover, for Ukraine, Norway’s Statoil is a mirror reflection of Russia’s Gazprom. Gazprom shows no interest in the development of Ukraine’s GTS because the Russian strategy is putting emphasis on bypass gas pipelines (Nord Stream, Blue Stream, and South Stream). Statoil is also uninterested in the development of Ukraine’s GTS, for it is important for Norway that as little as possible Russian gas should come to Europe. It is Germany, Austria, Italy, the Czech Republic, and, to some extent, Turkey that may be interested in the development and functioning of Ukraine’s GTS. A ‘pool’ of all or some of these countries might evince interest in leasing or buying a part of Ukraine’s GTS.”
