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

Hostage Crisis Could Divide Japan Over Plans to Boost Military

Japanese Chief Cabinet Secretary Yoshihide Suga said Monday the government is working closely with the Jordanian government to secure the release of remaining Japanese hostage Kenji Goto More

Video Brussels Shaken as New Greek Leader Challenges Europe’s Austerity Drive

Country's youngest ever PM Alexis Tsipras, 40, sworn in Monday and says he will restore dignity to Greece by ending spending cuts More

Multimedia National Geographic Photo Camps Empower Youth

Annual mentoring program's mission is to give young people a voice to tell their own stories through photography 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.
Obama Urges Closer Economic Ties During Historic India Visiti
X
Aru Pande
January 26, 2015 9:33 PM
U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video Obama Urges Closer Economic Ties During Historic India Visit

U.S. President Barack Obama says the United States and India must do better to capitalize on untapped potential in their economic relationship - by removing some of the roadblocks to greater trade and investment. As VOA correspondent Aru Pande reports from New Delhi, Obama spoke after participating in India’s Republic Day celebration.
Video

Video US, EU Threaten New Russia Sanctions Over Ukraine

U.S. President Barack Obama has blamed Russia for an attack by Ukrainian separatists that left dozens dead in the port of Mariupol and cast further doubt on the viability of last year’s cease-fire with the Kyiv government. VOA’s Michael Bowman reports from Washington.
Video

Video White House Grapples With Yemen Counterterrorism Strategy

Reports say the U.S. has carried out a drone strike on suspected militants in Yemen, the first after President Barack Obama offered reassurances the U.S. is continuing its counterterrorism operations in the country. The future of those operations has been in question following the collapse last week of Yemen’s government. VOA White House correspondent Luis Ramirez reports.
Video

Video Kerry Warns Against Violence in Nigeria Election

US Secretary of State John Kerry visited Nigeria Sunday in a show of the level of concern within the U.S. and the international community over next month’s presidential election. Chris Stein reports.
Video

Video Zoo Animals Show Their Artistic Sides

The pursuit of happiness is so important, America's founding fathers put it in the Declaration of Independence. Any zookeeper will tell you animals need enrichment, just like humans do. So painting, and even music, are part of the Smithsonian National Zoo's program to keep the animals happy. VOA’s June Soh met some animal artists at the zoo in Washington. Faith Lapidus narrates.
Video

Video Worldwide Photo Workshops Empower Youth

Last September, 20 young adults from South Sudan took part in a National Geographic Photo Camp. They are among hundreds of students from around the world who have learned how to use a camera to tell the stories of the people in their communities through the powerful medium of photography. Three camp participants talked about their experiences recently on a visit to Washington. VOA’s Julie Taboh reports.
Video

Video Saudi, Yemen Developments Are Sudden Complications for Obama

The death of Saudi Arabia's King Abdullah and the collapse of Yemen’s government have cast further uncertainty on U.S. efforts to fight militants in the Middle East and also contain Iran’s influence in the region. VOA White House correspondent Luis Ramirez reports on the new complications facing the Obama administration and its Middle East policy.
Video

Video Progress, Some Areas of Disagreement in Cuba Talks

U.S. and Cuban officials are reporting progress from initial talks in Havana on re-establishing diplomatic ties. U.S. Assistant Secretary of State (for Western Hemisphere Affairs) Roberta Jacobson said while there was agreement on a broad range of issues, there also are some “profound disagreements” between Washington and Havana. VOA State Department correspondent Pam Dockins has the story.
Video

Video US, Japan Offer Lessons as Eurozone Launches Huge Stimulus

The Euro currency has fallen sharply after the European Central Bank announced a bigger-than-expected $67 billion-a-month quantitative easing program Thursday - commonly seen as a form of printing new money. Henry Ridgwell reports for VOA from London on whether the move might rescue the eurozone economy -- and what lessons have been learned from similar programs around the world.
Video

Video Nigerian Elections Pose Concern of Potential Conflict in 'Middle Belt'

Nigeria’s north-central state of Kaduna has long been the site of fighting between Muslims and Christians as well as between people of different ethnic groups. As the February elections approach, community and religious leaders are making plans they hope will keep the streets calm after results are announced. Chris Stein reports from the state capital, Kaduna.
Video

Video As Viewership Drops, Obama Puts His Message on YouTube

Ratings reports show President Obama’s State of the Union address this week drew the lowest number of viewers for this annual speech in 15 years. White House officials anticipated this, and the president has decided to take a non-traditional approach to getting his message out. VOA White House correspondent Luis Ramirez reports.
Video

Video S. Korean Businesses Want to End Trade Restrictions With North

Business leaders in South Korea are calling for President Park Geun-hye to ease trade restrictions with North Korea that were put in place in 2010 after the sinking of a South Korean warship.Pro-business groups argue that expanding trade and investment is not only good for business, it is also good for long-term regional peace and security. VOA’s Brian Padden reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid

World Currencies

EUR
USD
0.8893
JPY
USD
118.31
GBP
USD
0.6660
CAD
USD
1.2459
INR
USD
61.427

Rates may not be current.