News / Economy

EU Struggles to Unpick Knot of Russia-Ukraine Gas Logistics

Pipelines are seen at a gas border delivery station of pipeline operator Eustream in the eastern Slovak town of Velke Kapusany, near the border with Ukraine, April 15, 2014.
Pipelines are seen at a gas border delivery station of pipeline operator Eustream in the eastern Slovak town of Velke Kapusany, near the border with Ukraine, April 15, 2014.
Reuters
Unprecedented talks across the European Union on Tuesday showed it scrambling for solutions on the ground to break its dependence on Russian gas and help supply Ukraine.

The EU faces a daunting task in quickly overcoming a mountain of logistical challenges, avoiding breaking binding contracts and making sure Ukraine does pay up for gas.

Russia supplies 30 percent of Europe's gas needs. It has threatened to cut off supplies to Ukraine because of debts reviving fears of a repeat of supply crises across Europe of 2007 and 2009.

Offering some relief for Ukraine, Germany's RWE began deliveries of natural gas on Tuesday, marking an initial step in EU efforts to boost supplies to Kyiv.

Sending gas to Ukraine from the EU is a powerful weapon.

The Russian state gas export monopoly Gazprom has long protested against the scheme, saying it feared its gas destined for Germany would be re-exported to Ukraine in breach of contracts.

RWE said it is a mixture of gas supplies from many sources, and Ukraine could get as much as 10 billion cubic meters (bcm) of gas per year under a framework 2012 agreement.

That would be a big boost to Kyiv - allowing it to cut Russian gas imports by a third - especially after Moscow nearly doubled the gas price it charges Ukraine, tearing up a discount agreed with the previous pro-Moscow president.

Delivery challenges

The problem would be to deliver the gas to Ukraine, which has annual gas consumption of 55 bcm.

Polish pipeline operator Gaz-System said it could deliver 1.5 bcm annually, Hungary can probably send another 3.5 bcm to Ukraine, while Romania has the potential to send 1.8 bcm, but there has been no firm agreement on its deliveries.

Slovakia is the EU's best-placed member to pump gas to Ukraine but reversing flows along any of the four pipelines that take Russian gas to it via Ukraine would require an agreement that doing so does not violate current contracts with Gazprom.

Slovakia and Ukraine failed to reach an agreement on Tuesday on reversing the flows, Slovak Economy Minister Tomas Malatinsky said.

Instead, the two sides are considering signing a memorandum later in April on a proposal to reopen a disused pipeline to take some gas out of a main East-West line, on the Slovak side of the border, and loop it back into Ukraine.

The link could supply more than three bcm annually to Ukraine from October, rising to around nine bcm by next spring.

”The memorandum which is prepared is a certain step toward reverse supplies from the European Union, but I am saying openly that given the situation - a very exceptional situation - we would need substantially more,” Ukrainian Energy Minister Yuri Prodan told reporters.

South Stream

While reverse flows would help cushion the effects of a Russian export cut during mild-demand summer months, analysts say they would not be sufficient in the winter.

Some countries in Europe are even more reliant on Russian gas than Ukraine, including Bulgaria, where the energy minister said on Tuesday he had discussed importing gas from Azerbaijan should Russia cut off supplies.

”We are carefully monitoring the situation in Ukraine. We discussed short-term actions so that we can guarantee gas supplies,” Dragomir Stoynev told reporters after meeting Azeri counterpart Natik Aliyev.

Aliyev said the pair discussed delivery of liquefied natural gas (LNG) to Greek ports and from there to Bulgaria.

Neither Azerbaijan nor Greece have the LNG terminals to provide such cargoes at the moment.

Russia pressed ahead with its South Stream natural gas link to Europe which aims to bypass Ukraine and help Moscow increase its share of the continent's supply, especially in southern Europe.

Following previous gas rows with Kyiv, Russia has invested billions of dollars in new pipelines, including Nord Stream, which brings additional gas to Germany bypassing Ukraine.

South Stream is planned to pump gas into Bulgaria and from there further into the EU by the end of the decade.

Gazprom's partner in the project, Italy's Eni, has said the future of South Stream has been put in question by the escalating dispute over Ukraine.

The EU has also postponed clearing the project.

Despite the crisis in relations, the consortium running the South Stream project said it would start laying the first stretch of pipes this fall.

You May Like

Ukraine Purges Interior Ministry Leadership With Pro-Russian Ties

Interior Minister Avakov says 91 people 'in positions of leadership' have been fired, including 8 generals found to have links to past pro-Moscow governments More

US Airlines Point to Additional Problems of any Ebola Travel Ban

Airline officials note that even under travel ban, they may not be able to determine where passenger set out from, as there are no direct flights from Liberia, Guinea or Sierra Leone More

Nigerian President to Seek Another Term

Goodluck Jonathan has faced intense criticism for failing to stop Boko Haram militants More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7893
JPY
USD
107.68
GBP
USD
0.6238
CAD
USD
1.1214
INR
USD
61.185

Rates may not be current.