The National Bank of Ukraine (NBU) predicts a sharp decrease in the volume of transit of blue fuel through the country's gas transmission system (GTS). According to the base scenario of the regulator, it will fall from 90 billion cubic meters. m to 50 billion cubic meters m in 2020. Since 2021, gas pumping will not exceed 30 billion cubic meters at all. m, according to the NBU.
"Direct economic losses compared with transit volumes at the level of 2019 will amount to 0.6% of GDP in 2020 and 0.9% of GDP in 2021," the National Bank said in a statement.
The NBU noted that the republic annually earns about $ 3 billion in gas transit. Reducing the volume of pumping can lead not only to “direct losses in foreign exchange earnings, but also create risks for the activities of related sectors of the economy and meet Ukraine’s gas needs”.
The NBU explains the decrease in revenues from transit through the gas transportation system by the fact that Russia "is actively putting into operation gas bypass pipelines." In terms of total capacity, the new infrastructure, which is being completed in the interests of Gazprom and its European partners, will be able to "completely replace the Ukrainian gas transportation system in the coming years," the regulator points out.
“Have to collect debts”
Recall, on October 30, the Danish energy agency issued Nord Stream 2 AG permission to lay a section of the Nord Stream-2 gas pipeline through the continental shelf of the country. Construction work should start soon. They will allow to complete the project. The total capacity of the two Nord Stream 2 strings will be 55 billion cubic meters. m of gas per year.
The head of NAK Naftogaz Andrey Kobolev called the decision of Denmark expected. On his Facebook page, he wrote that to date, only the sanctions against participating companies can restrain the implementation of the gas pipeline project. "Nord Stream - 2" Kobolev called the "geopolitical weapon" of Moscow.
In this situation, according to the head of Naftogaz, Ukraine needs to continue reforming the gas market, as well as complete the integration of European energy legislation into the country's legal system. In his opinion, these measures will allow to “protect” Ukrainian consumers and partners in the EU.
As Ruslan Bortnik, director of the Ukrainian Institute for Analysis and Policy Management (Kiev), said in a conversation with RT, behind Kobolev’s “beautiful phrases” lies the desire of Kiev to raise prices for blue fuel. In the short term, they will grow for industry. Already in November, Ukrainian enterprises will pay 18.4-19.6% more for natural gas than in October.
“Rising gas prices weaken the competitive advantages of Ukrainian industry. In addition, it provokes a jump in tariffs for utilities. In order for Zelensky to fulfill his promise (not to raise them. - RT ), the government will have to increase the amount of subsidies. How to do it? Apparently, due to the reduction of expenses for other social needs, ”Bortnik explained.
The deputy director of the Institute of the CIS countries, Vladimir Zharikhin, in an interview with RT called the price of gas for the population “an object of political speculation.” He stressed that Kiev is able to provide citizens of the country with a sufficient amount of blue fuel extracted in the bowels of Ukraine.
“This is a purely political question, what price to set for gas for the population. If Zelensky does not yield to the pressure of the oligarchs, then it will remain the same. If he behaves differently, then naturally, prices will increase. True, in this case, Zelensky’s rating will collapse to the level of the late Poroshenko, ”says Zharikhin.
- Laying pipes of the Nord Stream 2 gas pipeline
- Reuters
- © Stine Jacobsen
Experts say that the first negative consequence of a reduction in the transit of Russian gas through the gas transportation system will be a fall in state revenues in Ukraine. In 2020, the government expects revenue to the treasury to be 1.0795 trillion hryvnias (about $ 43.6 billion). Moreover, almost half of the taxpayers' money will go to pay off debts (438 billion hryvnia, $ 17.7 billion).
“If Kiev does not achieve a radical increase in the transit tariff, and this is unlikely, then it will lose up to 5% of its income or approximately $ 2 billion. The amount is very significant on a Ukrainian scale, and no one knows where to get it. Most likely, we will have to collect debts again, ”Bortnik believes.
"Trying to blackmail Russia"
Another problem that Kiev cannot solve yet is the lack of agreements with Moscow on gas transit to Europe. The current agreement expires on January 1, 2020, and at the moment the parties have not reached a compromise.
“At the end of 2019, the ten-year agreement between Ukraine and the Russian Federation on gas transit ends. Negotiations on a new contract are ongoing, and there is no certainty either in terms of time or in transit volumes, ”the NBU said following a trilateral consultation on October 28.
At present, Ukraine and Russia have a transit agreement, concluded in January 2009 between the Prime Ministers of the two states, Vladimir Putin and Yulia Tymoshenko. Among other things, the document obliged Kiev to purchase at least 33 billion cubic meters. m of gas per year, but since 2014 Ukraine has not fulfilled this condition.
In November 2015, Kiev completely stopped acquiring blue fuel from Gazprom. From that moment, Ukraine became an importer of “European” gas, which is supplied from Slovakia, Hungary and Poland.
Vladimir Zharikhin recalled that “European” gas is supplied to Ukraine according to the reverse scheme: in essence, this is all the same Russian fuel purchased by Eastern European EU member states.
“Kiev buys gas from Europe at a premium, it can be cheaper only in certain periods. Naturally, there is no need to talk about any benefit and "gas" independence. It is in the interests of Kiev to conclude a new transit contract with Moscow and resume direct gas purchase, ”Zharikhin said.
Moscow insists on the extension of the current agreement regarding transit to Europe (representatives of the Russian Federation do not voice the extension period).
- Gas storages near Lviv
- © Valentyn Ogirenko / Reuters
In turn, Kiev is considering various scenarios of pumping blue fuel, leaving behind the brackets the possibility of concluding a long-term contract. In particular, the Ukrainian authorities propose the establishment of an “independent” GTS operator operating in accordance with European gas legislation.
In addition, Kiev continues to seek payment of $ 2.56 billion from the Russian Federation based on the results of the Stockholm arbitration. On October 29, Naftogaz’s executive director Yuri Vitrenko wrote on Facebook about preparing a new lawsuit against Gazprom.
“Ukraine is trying to blackmail Russia. Kiev takes advantage of the fact that pumping Russian gas through the Danish section will be impossible for several more months. Therefore, now Naftogaz seeks to negotiate the maximum possible pumping volumes. However, this ends the tactics of the leadership of Ukraine. In Kiev they don’t know what to do next with decrepit GTS, ”Zharikhin explained.
Ruslan Bortnik believes that in resolving the gas issue "the Kiev authorities drove themselves into a remote corner." According to him, the rejection of direct purchases of Russian fuel and the general normalization of relations with the Russian Federation deprives Ukraine of the foundation for socio-economic development. He called Kobolev the “chief architect” of the approaching crisis, who retained the post of head of Naftogaz after the election victory of Vladimir Zelensky.
“The actions of the Ukrainian authorities on the gas issue are a crime against the economy and their own people. Kobolev, in my opinion, is surrendering the country's interests to "Western partners." Without a long-term contract and normal relations with Moscow, Ukraine will not be able to ensure the operation of the GTS on acceptable terms and save the national industry, which is the main consumer of Russian gas, ”Bortnik summed up.