Drop in Russian gas transit could lead to technical issues – Naftogaz CEO

KYIV. Sept 13 (Interfax-Ukraine) – The possible drastic decrease in the transit of Russian natural gas through Ukraine caused by a launch of the Nord Stream 2 pipeline would lead to such alterations in the physical and chemical properties of gas as to raise questions among European operators of gas transmission systems on the western border of Ukraine, Naftogaz CEO Yuriy Vitrenko has said.

If Gazprom sends nothing into Ukraine’s Gas Transmission System (GTS), "this would make it even easier for us: no need to comply with anything. But, if it sends in small amounts of gas or varies them considerably, [by sending] maximum one day and, say, minimum the next, then there will be physical problems, how to ensure transit of the gas with required physical and chemical properties specified by contracts between the Ukrainian operator and those in Slovakia, Poland, Hungary and so on," Vitrenko said on the sidelines of a YES Brainstorming conference in Kyiv on Saturday.

This could prompt European operators to accuse Ukraine of violating contract, causing them some technical problems, and thus question the reliability of transit via Ukraine, he said.

Transit contract has "some general provisions which in theory may protect us if we take the matter to a court," Vitrenko said. However, it is necessary to pay attention now before the problem could arise, he said.

"This is why it is important to resolve this issue in advance somehow," Vitrenko said.

For steady resolution it is necessary to do away with Gazprom’s monopoly on Russian gas supplies to Europe via Ukraine, move delivery points from Ukraine’s western border to its border with Russia, which was the whole point of the GTS switching to the European rules, he said.

As reported, Ukraine has new mandatory capacity booked for Gazprom under the ship-or-pay principle in 2021-2024: 40 billion cubic meters (110 million cubic meters per day) after 65 billion cubic meters (178 million cubic meters per day) in 2020.

Last year Gazprom shipped 55.8 billion cubic meters, less than stipulated by the contract and down 37.7 per cent in comparison with 2019 (89.6 billion cubic meters). The average daily volume of transit throughout the year stood at 153 million cubic meters, with 178 million cubic meters. Gazprom paid for the unused capacity under the contract.

The Ukrainian Energy Ministry, Naftogaz and the GTS Operator of Ukraine (GTSOU) allow that, if the Nord Stream 2 pipeline is commissioned, Gazprom could cut drastically its gas supplies via Ukraine without waiting for the current contract to expire in 2024 and notwithstanding the need to pay for any unused capacity to the GTSOU.