{"id":43382,"date":"2021-10-01T14:29:39","date_gmt":"2021-10-01T12:29:39","guid":{"rendered":"https:\/\/libmod.de\/?p=43382"},"modified":"2021-10-01T14:53:40","modified_gmt":"2021-10-01T12:53:40","slug":"ukraine-can-help-eu-in-gas-price-crisis-pavlenko","status":"publish","type":"post","link":"https:\/\/libmod.de\/en\/ukraine-can-help-eu-in-gas-price-crisis-pavlenko\/","title":{"rendered":"Ukraine can help in the EU gas price crisis"},"content":{"rendered":"

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Foto: Shutter\u00adstock, Mykola Tys<\/figcaption><\/figure>\n

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Europe is suffering from high gas prices. At some gas hubs, they increased more than 250%<\/a> since January, and already have impact on the retail prices for house\u00adholds in many EU countries, like France, Italy, Spain. The govern\u00adments consider<\/a> multi-billion support packages to soften the blow from the price growth. And the crisis does not look like going to the end \u2013 with more cold weather and under\u00adfilled gas storages<\/a>, the prices may stay high during the winter season.<\/p>\n

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Russian Gazprom and Norwegian Equinor are the major gas suppliers to the EU, covering more than 50%<\/a> of Europe\u2019s needs. Equinor reacted to the crisis with the plans to boost gas production<\/a> and to increase supply to the European countries. The answer from the CEO of Gazprom Alexey Miller was that Asian gas market is more attractive<\/a>, even with the today\u2019s European gas prices. There should not be any illusions among Europeans that Russia will start saving the EU economy or customers \u2013 even if the IEA argues<\/a> that Gazprom is able to increase gas exports to the EU and help to cover the expected deficit.<\/p>\n

It is not only the IEA who believes that Gazprom is able but does not aim to help solving the gas crisis in the EU. More than 40 members of the European Parliament have sent a letter to the European Commission<\/a> asking to inves\u00adtigate possible manip\u00adu\u00adlation by Gazprom and potential violation of the EU compe\u00adtition legis\u00adlation. The U.S. Energy Secretary Jennifer Granholm noted at one of her briefings<\/a> that manip\u00adu\u00adla\u00adtions of gas supply might be in place, which demands more unity from the U.S. and the European partners. Although Gazprom insists<\/a> that it is fulfilling the contracts by 100%, it does not deny that more can be done on its side if there is a political will in place.<\/p>\n

Gazprom insists<\/a> that it increased its exports to the EU to the level \u201cclose to the histor\u00adi\u00adcally recorded high\u201d. But closer looks at the gas production and use of gas export routes show there is still a lot of possi\u00adbil\u00adities to increase gas exports from the Russian side. Although the year 2020 was quite uneasy for Gazprom which produced only 452 bcm of gas (in comparison, gas production in 2019 was 501.2 bcm), the company insisted<\/a> it produces enough to cover all needs inside the country and outside it. The level of Russian gas export<\/a>s to Europe (incl. Turkey) varied between 179 bcm in 2020 and 203.9 bcm in 2018, and the experience of 2018 can prove that it should not be a problem for the company to increase gas exports up to 20%.<\/p>\n

Source: https:\/\/www.kommersant.ru\/doc\/4642213<\/figcaption><\/figure>\n

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Moreover, the existing supply routes are still available to rapidly increase gas exports to the EU. While Russia fully uses Nord Stream 1 and Yamal pipelines, the Ukrainian gas transit system still works only with part of its capacity. The system can transit to the EU<\/a> more than 140 bcm annually \u2013 yet, according to the contract signed in 2019, the Russian company is obliged to transit no less than 40 bcm via this route by the end of 2024. Data shows that Ukrainian gas pipelines, despite capacity, are being used on the residual principle, mainly to cover demand peaks, while other pipelines which are controlled by Gazprom are working at their full capacity.<\/p>\n

Source: https:\/\/ec.europa.eu\/energy\/sites\/default\/files\/quarterly_report_on_european_gas_markets_q1_2021_final.pdf<\/figcaption><\/figure>\n

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Gas Trans\u00admission System Operator of Ukraine (GTSOU) regularly reports it is ready to transport more volumes of gas and can increase the transit rapidly, as the system capacity allows it. According to the CEO of GTSOU Sergiy Makogon<\/a>, Ukraine can solve the gas crisis in the EU through trans\u00adporting more than Nord Stream and Nord Stream 2 combined. The capacity of Ukrainian gas transit pipelines is 146 bcm, while the capacity of both \u201cNord Streams\u201d is 110 bcm (if exempted from the EU law and utilized in full capacity by Gazprom \u2013 which should not be the case). Moreover, gas transit via Ukraine decreased<\/a> by 13% in 6 months of 2021 year-on-year. Even the fact that GTSOU persis\u00adtently auctioned additional transit capacity, it was Gazprom who ignored this possibility.<\/p>\n

Gazprom is already imple\u00admenting the strategy to avoid use of Ukraine gas pipeline system for the future. Although there is a general confir\u00admation from some Russian politi\u00adcians there might be some volumes transited via Ukraine in the future, such volumes might not be enough to keep the Ukrainian gas system profitable. There might be another scenario<\/a>, when too low transit volumes would make impos\u00adsible for Ukraine to comply with quality standards of transit to the EU at all, and there will be no backup option in case of similar gas crisis in Europe or in case some of Russian pipelines \u2013 especially the offshore \u201cstreams\u201d which don\u2019t have a possi\u00adbility to quickly reroute gas flows \u2013 will stop for mainte\u00adnance or repairs. In that case, the scenarios like the EU meets today could be even more frequent.<\/p>\n

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Olena Pavlenko is Chair of the PWYP Global Council and President of the DiXi Group, a Kyiv-based think-tank special\u00adising in research and consul\u00adta\u00adtions in the energy sphere. <\/i><\/p>\n

Olena works in the energy sector for more than 17 years, dealing with such issues as energy security, energy trans\u00adparency, oil and gas market liber\u00adal\u00adi\u00adsation, EU-Ukraine-Russian energy relations, hydro\u00adcarbon devel\u00adopment issues.<\/i><\/p>\n

Olena has served as not-on-staff Advisor to the Minister of Foreign Affairs of Ukraine (2019) and to the Minister of Energy (2015\u20132016).<\/i><\/p>\n

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