You're reading: Gas supplies from EU are the most realistic way of diversification, says president’s address

The most realistic way of diversifying supplies of natural gas to Ukraine in the future will be to arrange deliveries from the European Union, in particular, the purchase of gas on the spot market outside the heating season, when spot prices of natural gas are lower than the prices under long-term contracts, reads the president's annual address to the Verkhovna Rada on the domestic and foreign situation in Ukraine in 2013, which was published on the Web site of the head of state on Thursday.

“We should make use of the unique Ukrainian underground gas storage
facilities in full, including for the needs of European consumers,”
reads the document.

Yanukovych noted that successful experience of supplies of spot gas
from the European Union to Ukraine under a contract with Germany’s RWE
in the reverse mode of the gas transport system had proved the promising
character of this means of diversification of energy sources.

The head of state also said that an additional way of diversifying
natural gas supplies in large volumes could be the realization of a
project on the construction of an LNG terminal in the future.

“Systemic work first aimed at searching for natural gas resources,
with the signing of corresponding future contracts and processing of
project logistics is required,” reads the document. According to the
address, Qatar and the United States could be possible suppliers of
liquefied gas in Ukraine in the first phase, as they have large stocks
of liquefied gas and good prices. At the second phase, after the
creation of the relevant infrastructure in Georgia, Azerbaijan could
supply liquefied gas.

One of the alternatives for supplying LNG to Ukraine is the use of
the Turkish terminal in the Sea of Marmara, Yanukovych added. He said
that this would settle the problem of using the Bosphorus Strait for
tankers approaching the Ukrainian terminal and involving the gas
transport facilities of Romania and Bulgaria.

“In the medium-term and long-term outlook, natural gas from
Azerbaijan and Turkmenistan could be a way of diversifying supplies and
using transit opportunities,” the head of state said. He said that it
was better to offer investors in the TANAP and Nabucco West projects to
transit up to 10 billion cubic meters of gas via Ukraine using Ukrainian
underground storage facilities: via Bulgaria and Romania to Ukrainian
underground storage facilities, and from them via Slovakia to other EU
countries.

Yanukovych said that it is better to return to the consideration of
the White Stream project as an alternative route of natural gas supplies
from Azerbaijan to Ukraine, and if the project on the construction of
the Trans-Caspian gas pipeline is success, also from Turkmenistan and
Kazakhstan.

“The realization of promising options for diversification of sources
of gas imports could help Ukraine not only ensure it has alternative
supplies of gas at the level of up to 10-15 billion cubic meters every
year under a conservative scenario, but also promote the attraction of
new transit gas flows for the fuller use of the gas transport system,”
reads the document.

“The successful realization of the project on natural gas supplies
from the European Union to Ukraine in the reverse mode opens a promising
opportunity of participating in the natural gas sport trade system in
the European Union for our country,” he added.