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Ukraine can stop importing Russian gas
"Naftogaz of Ukraine" is the
biggest corporate importer of Russian gas. The combination of high price and
no costs of international transit has made Ukraine the most profitable
market of Gazprom. However, the current plan of Gazprom is likely to result
in losing this jewel market to the competitors.
The pipeline construction plan
assumes the total replacement of Ukrainian transit flows by deliveries via
the Nord Stream and South Stream pipelines. In my view, this strategy
misses a very important point - the possibility of switching the existing
gas pipelines of Eastern Europe for the reversal flow. This inexpensive
operation will allow Ukraine receiving gas from Nabucco via the
Baumgarten-Uzhgorod pipeline, the projected LNG terminals in Trieste,
Croatia, Poland, Germany and many other sources.
Table 1.
Exports of Russian Gas to Europe
and Turkey in 2017, bcm
|
European exports by
destination: |
Plan of Gazprom |
Nord
Stream-2 |
Nord
Stream-1 |
|
Ukraine (1) |
- |
63 |
91 |
|
Belarus |
35 |
35 |
35 |
|
Finland |
6 |
6 |
6 |
|
Blue Stream |
16 |
16 |
16 |
|
Nord Stream (2) |
55 |
55 |
27 |
|
South Stream (2) |
63 |
- |
- |
|
Total pipeline
exports: |
175 |
175 |
175 |
|
Deliveries
to Ukraine: |
|
|
|
|
Russia and via Russian territory |
- |
25 |
38 |
|
Other sources |
40 |
15 |
2 |
(1) Excluding transit to
Moldova.
(2)
Full load is required for
the commercial viability of the bypassing pipelines.
The two bypassing
pipelines with the total investment cost of over $40 billion
(excluding the pipeline construction costs in Russia) can save
Gazprom $3-4 billion of annual transit costs in Ukraine. This is
just one side of the story. In my view, Gazprom also needs to
evaluate the risk of losing its most profitable market that
generates at least $10-12 billion of annual revenue.
Mikhail Korchemkin
March 3, 2010
Malvern, Pennsylvania,
USA
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