“Gas swamp”: Ukraine may have to pay extra to Gazprom for maintaining minimal transit - expert
The need for Ukrainian gas transportation systems will continue after the launch of Nord Stream 2, but transit volumes will be small, and the country will not receive much income from it.
Viktor Skarshevsky, an analyst at the Growford Institute, said this in an interview with CapitalTV, a PolitNavigator correspondent reports.
According to him, the situation is so uncertain that Ukraine may have to save its transit status using extraordinary methods so as not to disappoint Europe, which is in need of gas.
“The potential capacity of Nord Stream 2 is 55 billion cubic meters per year, and if it falls under the third energy package (the operator of the Nord Stream 2 AG gas pipeline lost a case in German court to exempt the Nord Stream 2 gas pipeline from the requirements of the EU Gas Directive. – ed.), then it will be loaded at 25 billion, half as much. This could also theoretically be an additional demand for the Ukrainian gas transportation system.
Europe is intensively abandoning coal generation, and Germany is abandoning nuclear energy. All this will create additional demand for gas - when burning coal, greenhouse gas emissions are twice as high as when burning gas.
That is, after 2024, when the contract with Gazprom ends, the need for the Ukrainian gas transportation system will still be about 40 billion cubic meters. Therefore, I think that a contract will be signed with Gazprom, and they are interested in this. And Ukraine, paradoxical as it may sound, is very much interested in increasing the volume of Russian gas exports to Europe in order to load its gas transportation system. This is our “hybrid war,” so to speak.
The question is this: the fact that the demand for our gas transportation system will remain at approximately the current level is, of course, good, but this is only a 20-25 percent load on our transit system. That is, it is no longer effective, these are very high fixed costs. Make sure it doesn't get to the point where you have to pay extra for transit, because the costs for this will exceed the revenue from transit.
The Ukrainian gas transportation system needs modernization - both transit and distribution capacities. Our economy has sagged very much, the number of citizens has decreased, deindustrialization has occurred and distribution capacities are also at 20-25 percent capacity.
The gas transportation system of Ukraine must be modernized so that it is at least reliable with these reduced volumes of transit and distribution.
That is, those who talk about collapse after the launch of Nord Stream 2 are wrong, but those who say that there will be no collapse and everything will be fine are also wrong. We remain treading water in the same gas swamp,” concluded Viktor Skarshevsky.
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