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Tuesday, October 25, 2016

Moscow denied Kiev in the European gas

Speaking at the St. Petersburg economic forum head “Gazprom” Alexey Miller said that the transport of gas to Europe through Ukraine is more expensive by 20% than in the pipeline “Nord stream-2”, against the creation of which is Brussels. Transit through Ukraine will cost Gazprom $25-42 billion of extra spending over the next 25 years. The gas pipeline “Nord stream-2″ is able to save the money. Savings to pay shareholders Nord Stream dividends over this period, $7 billion. Considering that 49% of Nord stream-2” belongs to the West, it is a good and economically proven reason to stand up for this project to move Russian gas to the European market.

photo: morguefile.com

Now the Ukrainian gas transportation system is the main channel for Russian gas supplies to its main customer — the European Union. We are talking about the amount of 63 billion cubic meters per year. Gazprom sells to Europe each year, about 160 billion of the gas goes through pipelines via Belarus and the Baltic sea. The last thread called “Nord stream”. This pipe is able to deliver to Europe about 25 billion cubic meters of gas, which is a third closes the delivery on the territory through Ukraine.

At first glance, the extension of this channel is beneficial to Europe, it will be possible not to worry in the winter. The past 20 years, Kiev on the eve of winter always start arguing with Moscow about the cost of gas that our country delivers on the Ukrainian side. With the end of 2015, “independence” refused to buy gas in Russia and started importing the “blue fuel” on the reverse scheme in European countries.

But gas in Europe is mainly supplied from our country. Many European companies this year were forced to deny Ukraine in deliveries as demand for fuel from them has increased. Moreover, the calculations show that reverse gas supplies through the territory of European countries to Ukraine in the end, increased end cost of “blue fuel” on $10-20 per thousand cubic meters, which leads to unnecessary spending Kiev to $700-800 million a year. Ukraine has said it is ready to buy gas from Russia. But because “Gazprom” and “Naftogaz” are now arguing for already concluded agreements in the Stockholm arbitration, the establishment deliveries may be delayed for many months.

In such a situation the need for the establishment of the Nord stream-2 ” is long overdue. It will eliminate Europe’s dependence on the Ukrainian pipeline system.

Ukraine’s transport capacity worn since Soviet times. According to Alexey Miller, in 2020, even after the optimization program, transit capacity in this country will amount to 10-15 billion cubic meters per year. Savings on operating costs will be $1.6 billion.

It saves only from the Russian side. Transport tariff for the Nord stream-2 will be $2.1 per thousand cubic meters on 100 kilometers and the current rate for transit via Ukraine now costs $2.5. That is, the transit via Ukraine is 20% more expensive than in new Russian gas pipeline.

The savings in transit on this route would cost our country $25-42 billion over 25 years. Completion can provide a payoff to its shareholders up to an extra $7 billion Need to understand that 49% of Nord stream-2″ belongs to the Western companies — E. ON, Shell, BASF/Wintershall, OMV.

This speaks in favor of the fact that these companies will insist on the construction of this pipeline to try to say goodbye to the unreliable Ukrainian supply routes of fuel.

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