1. Ukrainian Gas Transmission System and Energy Security
MYKHAILO GONCHAR
NOMOS Center
Ukraine
Kyiv, April 22

2. Gas Transmission System of Ukraine provides Russian gas transit to end consumers (~85 from 113 bcm in 2012)

3. All gas flows are mixed in one pipeline
NOTA BENE: Ukrainian Gas Transmission System isn’t a transit pipe from RF to the EU only
GTS provides for Ukrainian consumers:
Delivery of domestic gas (~20 bcma)
Delivery of imported gas (~35 bcma)
Gas storage (total capacity – 31 bcm)
All gas flows are mixed in one pipeline
114 different industrial consumers in 97 points are connected to 4 main transit pipelines systems: Soyuz, Progress, UPU, EKAI

4. Ukrainian dimension of UA-RF Gas Consortium:
Gazprom operation of GTS is a challenge
not only for energy security…
Gazprom’s operation of GTS means control NOT ONLY over transit gas flows from Russia to Europe but over gas supplies to state owned and private (oligarchic) industrial assets It means control of Ukrainian economy; It means involvement into Customs Union and ANSCHLUSS of Ukraine by Russia under umbrella of the Eurasian Union UKRAINIAN CONTROL OVER GTS MUST BE KEEPT BUT EUROPEAN REFORM MUST BE IMPLEMENTED

5. European dimension of Gazprom’s bypasses:
The scheme of future gas streams according to Russian dreams or
All routes are in Gazprom’s hands
NORD STREAM
YAMAL-EUROPE
MAINSTREAM.UA
Hub Baumgarten
SOUTH STREAM
TANAP+NABUCCO

6. European dimension of Gazprom’s bypasses: Surplus of pipelines capacities from Russia is a challenge for stability of gas supply to Europe
Route
Capacities, bcma
Ukrainian mainstream
142
Belorussian direction 35
Blue Stream 16
North Stream + Finland
55+7
Nord Stream (III-IV) 55
Yamal – Europe - II 15
South Stream 63
Total: existing/future
255 / 388
Gazprom’s
export to Europe
–138 bcm in 2012
(<113 bcm physically).
Contracted gas
volumes (LTC)
for
~158 bcma
Surplus:
142 / 230 bcma

7. Consequence 1: Surplus of capacities will generate manipulation of export’s routes and volumes which will generate instability of spot prices

8. Possible interruptions
Consequence 2: Future gas supplies to Lithuania and Ukraine are under risk of interruptions
According to order dated November 2012
Kaliningrad interconnector has to be built
Yamal Europe - II
According to order dated April 2013
Possible interruptions

9. Consequence 3: Concession of Ukrainian GTS by Gazprom means crash of gas supply diversification by reverse of existing pipelines and LNG-Project

10. Consequence 4: Concession of Ukrainian GTS by Gazprom means additional barrier to involve Black Sea shelf and unconventional gas flows into GTS to be delivered to domestic and foreign consumers

11. SOME CONCLUSIONS UKRAINIAN CONTROL OVER GTS MUST BE KEEPT
REFORM OF GAS SECTOR MUST BE IMPLEMENTED ACCORDING TO THE ENERGY COMMUNITY MEMBERSHIP OBLIGATIONS
UKRAINE SHOULD IMMEDIATELY JOIN IIIrd ENERGY PACKAGE OF THE EU
REVERSE GAS FLOWS FROM EUROPE TO UKRAINE MUST BE SUPPORTED, PROTECTED AND UPGRATED BY JOINT EFFORTS OF EC, POLAND, SLOVAKIA, HUNGARY AND UKRAINE
IMPLEMENTATION OF BRUSSELS DECLARATION ON MODERNIZATION OF UKRAINIAN GTS
INVOLVEMENT OF UGSF INTO EUROPEAN GAS STORAGE OPERATIONS

12. Дякую! Thank you! NOMOS/Strategy XXI www.nomos.com.ua
geostrategy.org.ua