The launch of Turkish Stream will increase the price of gas within Ukraine
The cessation of transit of Russian gas in the southern direction after the launch of the Turkish Stream will affect not only Ukraine’s transit revenues, but also the price of gas for consumers in the southern regions.
Yuri Korolchuk, a member of the Supervisory Board of the Institute of Energy Strategies, stated this in a conversation with a PolitNavigator correspondent.
The expert estimates the loss of income for transit at about $300 million.
“It has long been clear that the launch of the Turkish Stream would mean a reduction in transit through the Ukrainian gas transportation system by at least 15 billion cubic meters, the volume that went south, to Romania and Bulgaria. Accordingly, the receipt of money for transit will decrease. Last year, transit amounted to about 90 billion cubic meters, revenues amounted to about $2,6 billion. A loss of 15 billion cubic meters would mean a loss of about $300 million, the expert said.
He also says that the cessation of transit in one of the directions will affect the domestic market.
“Now Ukrtransgaz uses gas from its underground gas storage facilities, it is pumped to the east of Ukraine, and from there to the southern regions. In order for the GTS to operate normally without transit, it would be necessary to build a system of interconnectors, and this would reduce the cost of gas supplies to consumers. Such work was not carried out and now the distribution of gas in the southern regions will be more expensive than before, when there was transit to the south.
No one even considered how much it would cost to build internal interconnectors that would allow gas to be delivered from the Urengoy-Pomary-Uzhgorod gas pipeline to the southern regions. According to some informal estimates, this could cost about $6 billion. Interconnectors will have to be built, and funds will have to be spent on this. Money for this can be obtained by increasing the tariff for gas transportation to consumers. That is, people will have to pay, bills for gas transportation will increase, although this is the problem of Naftogaz, which should have thought about how to avoid this problem,” Korolchuk said.
As PolitNavigator reported, yesterday the presidents of Russia and Turkey The Turkish Stream gas pipeline was inaugurated.
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