MOSCOW - The European Union should assume some of the costs of filling underground gas storage facilities in Ukraine if it wants to safeguard itself against a worst-case scenario in the winter, Energy and Coal Minister Volodymyr Demchyshyn told The Wall Street Journal.
The EU estimates that Ukrainian storage facilities need to hold about 20 billion cubic meters of gas in order to guarantee stable gas supplies to Europe during the cold season, and gas purchases for this purpose should already begin in April. Demchyshyn believes it would be sufficient to store up 14 bcm-15 bcm.
The European Commission is developing worst-case scenarios and putting all the costs on Ukraine, the minister said. Ukraine is prepared to assume obligations for a baseline scenario, but the cost of the worst-case scenario might have to be shared, Demchyshyn said, adding that such a scenario assumes the suspension of gas supplies from Russia, a cold winter and growth of industrial activity in the EU.
He said Ukraine currently pays 15 percent more for Russian gas than for supplies it receives from Slovakia and other EU countries. In order to store an additional 5 bcm of gas it would need an extra $1.5 billion.
The minister also said that Ukraine might cut off gas supplies to the self-proclaimed Donetsk and Luhansk republics in eastern Ukraine because local distribution companies have only paid for 20 percent of supplies in the period since last August.
Russia sees risks for the transit of gas through Ukraine in the cold season, Russian Energy Minister Alexander Novak told reporters this week. “We certainly have concerns, that in the cold season, say, if our Ukrainian colleagues do not order and provide prepayment in time and the weather conditions are such that they won’t have enough of their own gas and reverse supplies, that there might be risks,” Novak said.
