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15 October, 2013 17:55   ▪  

The Financial Times: cleaning up of the gas games at the EU’s eastern border could liberalise the energy equation in Eastern Europe

A desperate plea from Kyiv to Brussels for help to import more gas from EU markets at lower prices than those charged by Gazprom was lost in the recent buzz over Tymoshenko case, The Financial Times reports.

“Ukraine has made progress over the past year. It began imports through small-capacity pipelines connecting it to Hungary and Poland. A symbolic 2bn to 3bn cubic metres, a small share of Kiev’s annual 30 bcm import needs, is to be imported this year through these routes. The gas derives from EU stocks – some of it originally imported from Gazprom but now surplus to requirements. Contracts with Germany’s RWE envision some 10 bcm of annual imports at prices lower than Gazprom’s,” the newspaper claims.

As it is also admitted “Ukrainian officials claim efforts to expand imports from the west are being blocked at its border with Slovakia.The capacity of pipelines crossing this border is much larger than those at the borders with Hungary and Poland – enough to handle simultaneously large exports to EU markets by Gazprom while also importing significant amounts of less expensive gas back east to cash-strapped Ukraine”.

READ ALSO: After Gas

Asked by FT journalists what was causing the hold-up, European Commissioner for Energy Günther Oettinger was light on details. But he hinted that Gazprom was a factor: “We are checking with our Slovakian and Ukrainian partners what is feasible technically, legally. We are working together with involved companies. Gazprom is a part of these discussions. We need some more time. It’s a huge challenge.”

Officials at Eustream, Slovakia’s gas pipeline operator, claim the problem lies on the Ukrainian side. A spokesperson said:

“Eustream is interested in smooth cross-border cooperation with Ukraine in both traditional and reverse flow directions. On the Slovak side Eustream is the sole [system operator] responsible for all measures related to gas transmission. On the other side, in Ukraine, the responsibilities are not fully clear and transparent.”

“Indeed, Ukraine may have created the problem itself years ago by allowing Gazprom to install its own systems at the border – though officials in both Ukraine and Slovakia are tight-lipped about what was done when and by whom,” the newspaper reports.

“While past arrangements remain murky, it’s clear today that Ukraine has its work cut out. It’s equally clear that more EU attention is also warranted. Cleaning up the gas games being played at the EU’s eastern border could help Ukraine diversify supplies in the short-term. In the long-term, it could potentially liberalise the broader energy equation in eastern Europe – a region still heavily dependent on Gazprom for supplies,” The Financial Times says.

READ ALSO: Death of the "Nabucco" pipeline scheme destroys EU’s plan to lower dependence on Russian gas

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