The February 13 memorandum between Ukrainian national oil and gas company Naftogaz Ukrainy and Turkmengaz calling for the resumption of gas shipments from Turkmenistan to Ukraine and European countries is just one of the elements of the "puzzle" of negotiations with Russia to create a gas transport consortium and reduce gas prices, experts said at a press conference hosted by Interfax-Ukraine on February 15.
“If we stand back from the link to the gas transport consortium and consider the situation as it is today, this agreement [between Turkmenistan and Ukraine] can’t be implemented…In order to physically supply Turkmen gas we need agreements with Russia,” independent energy market analyst Valentyn Zemliansky said.
He added that back in 2002-2003 Russia signed agreements with Central Asian suppliers, including Turkmenistan, to buy up all gas that can be exported. “Consequently, all the gas that Turkmenistan can supply to Ukraine is already contracted to Russia…Gazprom has not been fulfilling these contracts in full recently, but they exist,” Zemliansky said.
However, he believes that forming a consortium to manage Ukraine’s gas transport system and supply the country with a cheaper mix of Central Asian and Russian gas would benefit Russia.
“Of course, for Russia such a resolution of the situation is fairly beneficial. First of all, a consortium is created to manage Ukraine’s gas transport system and underground gas storage facilities. Secondly, Russia begins to fulfill its agreements with Turkmenistan, consequently reducing this country’s activity in the direction of China, in the direction of building a trans-Caspian gas pipeline,” Zemliansky said.
The head of energy programs at the Nomos center, Mykhailo Honchar, meanwhile, questioned whether supplies of a cheaper mix of Central Asian and Russian gas to Ukraine would fully satisfy Turkmenistan.
“The RosUkrEnergo arrangement was effective in the conditions of the middle of the last decade. Now the European and Ukrainian gas markets have changed. And Turkmenistan is no longer willing to sell its gas cheaply, as it was forced to do in the 1990s and in the last decade. Now, when Turkmenistan has the opportunity to supply gas to Iran and China, when there is talk that there will sooner or later be a trans-Caspian gas pipeline, there is no long such great interest in selling gas to Ukraine,” Honchar said, adding that Russia is unlikely to be happy with losing part of the Ukrainian market.
“Why is the situation fundamentally different now? Because additional amounts of liquefied gas are appearing on the European market, Norway is increasing shipments, while Gazprom’s share is shrinking there. The Ukrainian market for Gazprom is essentially a kind of compensation for losses on the European market. Therefore, giving up part of the Ukrainian market to Turkmen gas means further deteriorating Gazprom’s economics,” Honchar said.
Ukraine and Turkmenistan signed a memorandum in Ashgabat on February 13 that calls for resuming gas shipments to Ukraine and Europe, as well as exploration of fields in Turkmenistan.
The last shipments of Central Asian gas to Ukraine were made by companies controlled by tycoon Dmytro Firtash in 2011.
