Kiev preparing EU for disruptions of gas supply shifting blame to Russia

Naftogaz of Ukraine, the national oil and gas company, says Europe may face disruptions of gas supplies from Russia and blames Gazprom for it.

In a Facebook post, Naftogaz representatives say arctic cold temped in Ukraine for a few days only, while bitterly cold sweeps Russia now. They claim that Gazprom may feel shortage of resources to heat the country and export gas to Europe at the same time and may try to “throw Ukraine under the bus again.” Meantime, they say, Ukraine will use its own gas from gasholders. “Ukraine has no commitment to help Gazprom with its reserves when it feels any shortage,” Naftogaz representatives write. They used also Twitter to ironize: “Quite chilly in Russia. Huge challenge for Gazprom to manage this and supply Europe.”

Meanwhile, Gazprom did not comment the tilts, though it warned for a reason yet before New Year holidays that transit risks for Ukraine are possible. However, this bears no relation to the cold weather or Gazprom’s export commitments.

The problem is that stability and level of the gas transit via Ukraine depends on the pressure in the gas transportation system of the country, which, in turn, depends on reserves in gasholders that are at lowest ever level. Although EU and the Government of Ukraine recommended Naftogaz to accumulate 17-18 billion cubic meters of gas reserves for the autumn-winter season, the company has managed to reserve just 14.5 billion cubic meters. One of the reasons is that Ukraine did not import the Russian gas last year, while the capacity to receive reverse gas flows from Europe are limited. Besides, Kiev is short of money while it has to overpay for the “European gas,” as EADaily reported earlier.

The statements by Naftogaz Ukraine were triggered by the bitterly cold that has swept not only Russia. In Ukraine, the temperature fell 19 degrees Celsius and gas consumption has reached maximum. Ukrtransgaz PJSC Spokesperson Maxim Bilyavsky left a post on Facebook social media saying gas pumping from the gasholders have been increased several-fold – to 100 million cubic meters daily. As a result, on Saturday, Ukraine’s gasholders contained only 11.5 billion cubic meters of gas, according to Ukrtransgaz.

Experts say if current level of consumption continues for several weeks, Ukraine will face gas deficit. “Pessimistic forecasts: deficit will be felt as soon as in February,” says Dmitry Marunich, Co-Chair of the Energy Strategies Foundation. “Generally, gas reserves may be enough for daily consumption, but disruptions are possible during peak time.”

The expert says unstable winter works for Ukraine when cold weather does not last long and gas consumption dips.

“At present, it totals about 150 million cubic meters daily,” Marunich says. “Yet several years ago, gas consumption during intense cold periods exceeded 200 million cubic meters sometimes reaching 300 million cubic meters. If that continued for long, the country would face serious disruptions of gas supplies. Therefore, the economic crisis worked in favor of Ukraine. Consumption was reduced mainly by industrial enterprises. Due to it, Ukraine may overcome this heating season. Odessa Port Plant suspended operation on New Year’s Eve. The first enterprises whose gas supply will be halted in case of gas deficit will be the industrial ones. Then other measures will follow.”

That is why, it is quite possible that Ukraine will pump the transit gas, though, the expert says, everything will depend on weather, on which, at least, Gazprom will not rely. Yet in late December, Naftogaz of Ukraine complained that the Russian holding halted gas transit by 19% in favor of the Nord Stream. Gazprom said the Baltic gas pipeline uses even its reserve capacities and it is loaded by 110%. Such an opportunity emerged after European Commission’s decision on a new format of access to Opal gas pipeline. According to Gastransport Gmbh gas pipeline operator, instead of the previous 50%, in late December Opal was loaded with the Russian gas already by 81%.

Cold winter in Europe forced Russia to increase supplies to Europe too. Gazprom announced its record breaking daily export on January 8 – 621.8 million cubic meters of gas. The transit via Ukraine was restored. On January 7, 290 million cubic meters of gas were transited via the territory of Ukraine to Europe, Balkans and Turkey, according to Ukrtransgaz.

Perhaps, the recent statements by Naftogaz of Ukraine were connected with the growing transit.

“Ukraine transits gas via a gas pipeline running more than one thousand kilometers. The more gas is supplied, the higher pressure is required,” Dmitry Marunich says. “The current reserves in the gasholders are so far enough for uninterrupted gas transit. The issue is not that Naftogaz of Ukraine may pump the Russian gas. The problem is that its capacities may not be sufficient to transit equal volumes of gas from the eastern border to the western one for long.”

The expert recalls the 2012 when severe cold swept Europe and Ukraine “lost” tens of millions of cubic meters of gas on its territory.

“It was not that much, but enough to trigger disruptions of supplies to the north of Italy and Bulgaria,” he says. “A scandal broke out then, and Brussels demanded Kiev a deposit in the amount of 1.5 billion euros to repay the costs, but the Government managed to waive the claims and stifle the conflict that really hurt Europe.”

Other Ukrainian experts too believe that Naftogaz’s statements are connected with its possible failure to implement its commitments.

“Well, Russians will say that we steal gas. It will be an emotional game for EU. Legally, they will be on easy street. Let Naftogaz mention in its statements a specific provision of a document that permits it to take at least 1 million cubic meters of gas in the east for Uzhgorod. Unfortunately, it is Naftogaz’s responsibility to deliver gas. It cannot do without underground gasholders and reserves. Therefore, it is logical that Gazprom can raise the issue. Yet in autumn, they sent letters to all its customers that there could be problems with transit. Do you see any provocation here? Notorious Naftogaz may lead itself to a provocation in case of bad weather,” Ukrainian expert in energy issues Yuri Korolchuk posted on Facebook.