Time running out for Ukraine to stockpile gas for winter - Gazprom CEO

Time running out for Ukraine to stockpile gas for winter - Gazprom CEO
Winter is around the corner, and Kiev will not have enough time to fill its underground storage facilities with the 18-20 billion cubic meters of gas needed to survive the winter, and ensure EU supplies, warns Gazprom CEO Aleksey Miller.

Every year before winter, Ukraine stores up gas in its underground storage facilities in preparation to distribute it to homes and buildings when the cold weather hits.

“With regard to the volume of gas pumping into underground storage facilities in Ukraine, if we are talking about time remaining before the start of winter withdrawals, of course, Ukraine won’t have time to pump the necessary amount; 18 billion cubic meters at minimum, even better 20 billion cubic meters,” Miller told journalists.

Russian Energy Minister Aleksandr Novak said Ukraine may need an extra 10 billion cubic meters of gas, and that the current level is 16.5 billion cubic meters. Novak says it’s necessary to pump more to ensure winter goes off without a hitch, and to keep deliveries steady to European customers.

Energy ministers in Kiev estimate they need 20 billion cubic meters of gas, or 5 billion more than they have in storage to get through the winter. Ukraine’s requires about 50 billion cubic meters of natural gas per year.

It was reported earlier this week that Ukraine has started getting gas from Norway’s state oil company Statoil, via neighboring Slovakia. However, because of the route, it will be difficult to know whose gas is being sent where, and if the action is legal.

However, just because Ukraine is set for gas doesn’t mean the rest of Europe is. About 15 percent of Europe’s total energy supply runs from Russia through Ukraine. In June Gazprom shut off supplies to Ukraine, but continue to deliver to European neighbors.

The last round of trilateral gas talks, held in Berlin on September 26, concluded with a plan that Naftogaz, Ukraine’s national oil and gas company, would begin paying off its over $5 billion in debt owed to Gazprom.

The so-called “winter plan” will see Naftogaz paying back $2 billion of this debt to cover past arrears as well as a prepayment to cover 5 billion cubic meters from Gazprom to help survive the winter. The plan sets a price of $385 per 1,000 cubic meters of gas, which Kiev believes is too high, but is still much lower than other European clients.

Three-way negotiations between Russia, Ukraine and the EU are due to continue in the coming weeks.