An American liquefied natural gas tanker for Ukraine arrived at the Polish LNG terminal in иноwinoujцеcie. This was reported by the US Embassy in Kiev.
“This is another step in providing assistance to Ukraine to achieve energy independence,” the statement said.
After the collapse of the USSR, Russia remained the main supplier of natural gas to Ukraine, which provided significant discounts to the former Soviet republic.
At the end of 2013, Moscow once again agreed to give Kiev a discount on gas. At the same time, the parties agreed to determine its size on the first day of the first month of the quarter by signing an additional agreement. However, in 2014, Naftogaz violated the requirements of the transaction by delaying the repayment of arrears for deliveries. Moscow, in turn, canceled the discount.
At the same time, the anti-Russian sentiments of the new Ukrainian authorities did not prevent them from demanding that Russia maintain preferential fuel prices - Kiev began to dispute the cancellation of discounts. As a result, Russia was forced to transfer its Ukrainian partners to a prepaid supply chain.
In 2015, Ukraine stopped direct purchases of natural gas from Russia, switching to reverse supplies from European countries. Under this scheme, blue fuel is first delivered through Ukrainian territory to Europe, and then part of the transported volume is sold by European companies to Ukrainian consumers.
Due to the emergence of additional intermediaries in the supply chain, the final price has also increased. After abandoning direct import of Russian gas, a decrease in fuel consumption in Ukraine began. In 2017, it decreased (excluding production and technological expenses of Ukrtransgaz, oblgaz and mining companies) by 6.3% compared to the same period last year - to 28.4 billion cubic meters. m For comparison: in 2016, consumption without PTR amounted to 30.3 billion cubic meters. m, and in 2014 - 39.7 billion cubic meters. m
Some of these volumes of gas are produced in Ukraine - for example, between January and August of this year, 13.9 billion cubic meters of gas were produced in the country.
- Reuters
- © Gleb Garanich
Polish support
Poland intends to establish export to Ukraine. Warsaw is trying to become a major gas hub in Europe, and fuel supplies to Ukraine fit into the framework of this strategy, experts say.
The Polish side expects to make money on regasification and resale of American gas - for this, in 2015, an LNG terminal was opened in Polish Swinoujscie. In August 2019, Poland and Ukraine signed an intergovernmental agreement on cooperation in the supply of natural gas.
The parties agreed to cooperate "in the field of reforming the Ukrainian gas market, the Polish natural gas import infrastructure, the Ukrainian infrastructure for the storage and export of American liquefied natural gas, and the development of gas connectors in the region."
The Polish energy company PGNiG has previously signed several long-term contracts for the supply of LNG from the United States. The contract with Cheniere Marketing International provides for the receipt by Poland in 2019-2022 annually of about 0.7 billion cubic meters of gas after regasification, and from 2023 to 2042 - an average of 1.95 billion cubic meters per year after regasification.
The agreement with Venture Global LNG provides for the supply of 2 million tons of liquefied gas per year to Poland for 20 years, which corresponds to approximately 2.7 billion cubic meters of gas after regasification. In total, by 2022, US LNG supplies to Poland should reach 6.95 million tons per year (or 9.38 billion cubic meters), in addition, about 4 billion cubic meters of gas Poland will produce independently, another 2.7 billion cubic meters per year shipped from Qatar.
- Reuters
- © Valentyn Ogirenko
After regasification in Swinoujscie, fuel can be transported through the gas transmission system to Ukraine. In October 2019, Ukrtransgaz (a subsidiary of Naftogaz) informed the media about the completion of installation work to connect a new gas pipeline in the Lviv region to the Komarno compressor station to supply fuel from Polish territory.
Commenting on this news, the head of Naftogaz Andriy Kobolev noted that in annual terms the throughput of the pipeline could reach 6.6 billion cubic meters of gas - this is almost half of Ukraine’s current needs for fuel imports.
However, the Polish side is not yet ready to supply Ukraine with such an amount of gas. As the Polish gas operator Gaz-Sistem stated in its statement, the transport infrastructure on the Polish-Ukrainian border “does not allow the transfer of gas from Poland to Ukraine in such a volume.”
Today, Poland can supply Ukraine with about 2 billion cubic meters of gas per year, and “additional investments” are needed to expand the pipeline’s capacity.
"Political Pressure"
However, even if Poland gets the technical opportunity to significantly increase exports of regasified American LNG to the Ukrainian market, Kiev is unlikely to be able to pay for such supplies, experts say.
Although the value of the current contract has not been disclosed, according to Vygon Consulting experts quoted by Vedomosti, the price of a thousand cubic meters of American gas, including transportation for Kiev, could be $ 250.
Thus, the supply of fuel from the United States can cost even the reverse of Russian gas from Eastern Europe, which now costs Ukraine an average of $ 196 per thousand cubic meters.
Similar assessments in an interview with RT were made by Igor Yushkov, a leading expert at the National Energy Security Fund, a lecturer at the Financial University under the Russian government. In his opinion, the probable cost of American LNG could be for Ukraine about $ 250-300 per thousand cubic meters.
“Of course, this is even more expensive than reverse supplies from Europe. Last month, reverse gas cost Kiev $ 199.5 per thousand cubic meters. Even if the throughput of the Polish-Ukrainian gas pipeline and the regasification capacities of Poland is increased, it will be very difficult for Kiev to find funds for the purchase of LNG from the United States. But this can become a reality if Ukraine blocks the transit of Russian gas to Europe, in which case the reverse will also stop, ”the expert explained.
It should be noted that the possibility of direct deliveries from Russia to Kiev is not closed. As Russian Energy Minister Alexander Novak said on the eve, Moscow proposed that the Ukrainian side purchase 15 billion cubic meters of gas per year during recent tripartite consultations with the participation of the European Commission.
And the chairman of Gazprom, Alexey Miller, in October said that the cost of gas for Ukraine with direct deliveries could be 20% lower than with a reverse from Europe.
- RIA News
Yushkov emphasizes that it is Russian direct deliveries that could save Ukrainian consumers from rising gas tariffs.
“Moscow offers gas at about $ 180 per thousand cubic meters,” he explained.
The reasons why Kiev is unlikely to abandon financially disadvantageous supplies of American LNG and gas reverse from Europe lie in the political field, experts say.
As Yushkov noted, in Ukraine there are examples when criminal cases were instituted against politicians for gas contracts with Russia. For example, Yulia Tymoshenko suffered from this, for example. Also, do not forget about the role that nationalists play in Ukraine today.
“If Kiev concludes an agreement with Russia, the radicals can arrange a new Maidan.” Now in Ukraine it is very difficult to overcome the political pressure from radical nationalists, ”the expert noted.
A similar point of view is shared by the Deputy General Director of the National Energy Security Fund Alexey Grivach. As the expert explained in an interview with RT, at current prices, Poland, but certainly not Ukraine, can benefit from the supply of American fuel to Ukraine.
“Most likely, the current statement of the American embassy is just a PR campaign aimed at showing the participation of the United States in ensuring the“ energy security ”of Ukraine,” the expert summed up.