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25
November
2021

IMF estimates Ukraine's losses from Nord Stream 2 launch at $ 1.2 bln per year until 2024

KYIV. Nov 25 (Interfax-Ukraine) – The launch of the Nord Stream 2 gas pipeline is expected to reduce Ukraine’s gas transit revenues by about $ 1.2 billion a year until 2024, as long as the current transit contract with Gazprom is in force, the International Monetary Fund (IMF) said in the materials of the first review of the Stand-By Arrangement for Ukraine.

"The projected activation of the Nord Stream 2 pipeline will reduce Ukraine’s gas transit revenues. Over the last five years, Ukraine received an average of just over $2.5 billion per year in return for making its gas pipelines available to Gazprom. In 2021, transits fees are expected to be around 40% less than recent years. Once Nord Stream 2 is operational, the volume of gas passing through Ukraine could decrease further, with Ukraine’s transit revenues forecasted at around $1.2 billion per year. The current contract between Gazprom and Naftogaz will expire in 2024," the report says.

As reported, the agreement between Naftogaz and Gazprom for the organization of transportation, a transport agreement between Naftogaz and the new operator GTSOU, as well as an inter-operator agreement between GTSOU and Gazprom were signed on December 30, 2019 following the results of the trilateral gas negotiations Ukraine-Russia-European Commission.

The contract provides for transit in 2020 of at least 65 billion cubic meters of Russian gas, which in daily terms is 178 million cubic meters. In 2021-2024, transit will amount to 40 billion cubic meters. Payment for the above volumes is guaranteed even in the case of less pumping through the Ukrainian GTS.