Consulting firm Mott MacDonald estimates the cost of modernizing Ukraine's gas transport system at $3.2 billion.
The figure – from an interim report on the system modernization project – was given by head of the consulting outfit’s oil and gas division in Britain Azfar Shaukat during the international Ukraine-EU: On the Way towards Common Energy Market conference in Kyiv on Thursday.
Around $2.8 billion will be needed for overhauling the country’s gas pipelines and another $400 million for modernizing underground storage facilities.
This scenario involves the annual transporting of 110 billion cubic meters (bcm) of gas with a maximum load on trunk pipelines of 140 bcm.
As reported, the deputy chief of Ukraine’s national oil and gas company Naftogaz Ukrainy, Vadym Chuprun, last week estimated the investment needed for reconstructing and modernizing priority gas-transport facilities at $5.3 billion.
Ukraine officially announced that modernization had commenced this summer. The first stage of the reconstruction of Ukraine’s gas-transport system will be the modernization of the Urengoi-Pomary-Uzhgorod gas pipeline with the involvement of international financial organizations. The first phase of the modernization of the section of that pipeline in Ukraine is to take three years at a cost of $538.87 million, including $230.87 million of Naftogaz Ukrainy’s own funds and $308 million in credit funds ($154 million each from the European Bank for Reconstruction and Development (EBRD) and European Investment Bank).
Ukraine’s Energy and Coal Industry Ministry put the needed investment at $6.5 billion in July last year.
It is planned to find $2.4 billion for the modernization and reconstruction of the Soyuz gas pipeline, $1.3 billion for the Urengoi-Pomary-Uzhgorod pipeline, $1.5 billion for the Yeletz-Kremenchuk-Kryvy Rih-Izmail pipeline, and $871 million for the Progress pipeline. These projects are to be carried in 2010-2018.
The modernization and reconstruction of the Bilche-Volytsko-Uhersk underground storage facility will require $223 million, and that of the Bohorodchany facility will need $202 million. These projects will be carried out in 2010-2018, as well.
The period from 2010-2012 is to see the planned modernization of the compressor stations in Uzhgorod, Berehove, Tekovo, and Orlivka, which will require $95 million in investment.
The capacity of Ukraine’s gas transportation system is 288 bcm upstream and 178.5 bcm downstream. Transshipments of natural gas through Ukraine to other CIS countries and Europe rose 2.9% to 98.602 bcm in 2010. That included 142.5 bcm to countries in Europe and 3.5 bcm to Moldova.
