Ukraine ‘needs’ long-term gas transit contract with Russia – GTS operator

A long-term contract for the transit of Russian gas is crucial for Ukraine, which needs money to maintain its pipeline network, the country’s gas transmission system (GTS) operator says.

“We need a long-term contract that will cover our operational needs,” head of GTS Ukraine Sergei Makogon said on Tuesday.

Makogon stressed that servicing the country’s gas transmission system is expensive, being an enormous infrastructure with thousands of workers. Therefore, it will be difficult for Ukraine to maintain it “without significant long-term commitments,” he stressed.

Kiev strongly opposes the launch of Russia’s newly constructed Nord Stream 2 pipeline, fearing Moscow could scrap the transit contract with Ukraine and switch entirely or in part to the new system.

“Nord Stream 2 and Turkish Stream 2. What should Europe do? Investigate the abuse of dominance. Show solidarity. Answer resolutely. Protect transit through Ukraine. Do not give exceptions to EU rules,” read the presentation to Makogan’s speech at the conference.

Russia, however, repeatedly stated that it will respect commitments under the gas transit deal with Kiev. At the end of 2019, Russia and Ukraine signed a raft of agreements on the continuation of gas transit through Ukraine’s territory, including a five-year transit contract, according to which Russia’s state energy major Gazprom guaranteed the pumping of 65 billion cubic meters of gas during the first year and 40 billion cubic meters of gas annually over the next four years.

The head of Gazprom, Alexey Miller, recently said that the company is ready to continue gas transit through Ukraine after 2024, depending on economic feasibility and the technical condition of Ukraine’s gas transportation network. At the same time, he pointed out that the volumes of transit will have to be adjusted to the new volumes of purchases of Russian gas by EU states with consideration of Nord Stream 2 contracts.

The new Russian pipeline is awaiting EU certification to launch deliveries. The process could take up to four months due to bureaucratic procedures in Brussels as well as opposition to the project from Washington and some Eastern European states.

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