Ukraine's Energy and Coal Industry Ministry has again requested of the Energy Community Secretariat the immediate initiation of consultations over the South Stream gas pipeline project, which runs counter to Ukraine's national interests, an informed source in the government has told Interfax-Ukraine.
“In our view, the situation that has developed puts in doubt the
effectiveness of the realization of the Energy Community’s main tasks
involved in the creation of a unified energy market,” the Interfax
source quoted part of a ministry letter as saying.
Ukraine is providing an uninterrupted supply of energy resources to
Europe, but the large-scale planned work to modernize the country’s
gas-transport system requires long-term guarantees of natural gas
transit volume through the country, the ministry maintains.
“However, despite the availability of the reliably functioning
Ukrainian gas-transport system, which ensures the uninterrupted delivery
of energy resources to countries in Europe in conditions of an absence
of investments, certain member-countries of the Energy Community are
doing work on part of the South Stream project,” the letter says.
The Energy and Coal Industry Ministry points out that it has more
than once informed the European Commission and Energy Community
Secretariat of the negative view in Ukraine regarding the South Stream
project and has asked for immediate consultations in the context of the
Treaty Establishing the Energy Community, but to no effect.
As a result, the ministry says, at the Russkaya compressor station
(Anapa, Russia) is planned on December 7 a ceremony marking the welding
of the first joint of South Stream with Russian President Vladimir Putin
in attendance.
In the eleven-year natural gas transit agreement Ukrainian national
oil and gas company Naftogaz Ukrainy and Russian gas monopoly Gazprom
signed in 2009, there are no stipulations as to the minimum guaranteed
amount of transit gas or fines for failure to meet it. The associated
contract was built around the ‘take or pay’ principle, and although
Gazprom is not fining Naftogaz Ukrainy for reducing purchase volumes,
the risk is always there, and Kyiv’s many attempts to get both contracts
revised have proved fruitless.
With the launch of the first stretch of the Nord Stream pipeline,
which bypasses Ukraine, and Gazprom’s increased use of the Belarusian
pipelines it controls, the transit of Russian gas through Ukraine
continues to fall, further worsening Naftogaz Ukrainy’s already
difficult financial situation. in particular, in January-October this
year the amount transported through Ukraine to countries in Europe and
the Commonwealth of Independent States dropped off 19.2% year-on-year
(by 16.4 billion cubic meters (bcm)) to 69.2 bcm.
South Stream is an alternative to Nord Stream that also bypasses
Ukraine. Its first stretch will have throughput capacity of 15.75 bcm
and total designed capacity of 63 bcm per year and, taken with other
measures, could lead to a further decrease in transit through Ukraine.
Ukraine’s gas-transport system has carrying capacity at intake of 288
bcm and at outtake of 178.5 bcm, including 142.5 bcm in countries in
Europe and 3.5 bcm in Moldova.
