Russian gas transits through Ukraine to plunge dramatically
After Russia builds natural gas pipelines to Europe and Turkey, transit through Ukraine is expected to fall by more than 80 percent, according to Gazprom CEO Aleksey Miller.
“There are neighboring states, there are regions that are on the border with Ukraine, and, without doubt, supplies to these European regions will be carried out using Ukrainian transit. The other thing is that the volumes will undoubtedly be less significant,” Miller told Channel One Russia.
The volumes will fall from last year’s 93.5 billion cubic meters to about 10 to 15 billion cubic meters, said the head of Gazprom. The gas-transit contract between Russia and Ukraine expires in 2019 and Moscow has repeatedly said Ukraine will lose its status as a key transit hub to Europe. Russia wants to bypass Ukraine by doubling the capacity of the existing Nord Stream pipeline under the Baltic Sea.
In the beginning of March, Gazprom announced it had been forced to break its contract with Ukraine’s Naftogaz for the supply of natural gas. The announcement came after the Stockholm Arbitration sided with Kiev, ordering Gazprom to compensate Ukraine’s Naftogaz to the tune of $2.67 billion. Miller responded by saying the Russian company does not intend to help neighboring countries restore their economies at its own expense.
Gazprom and Naftogaz signed the contract, which runs until the end of 2019, in January 2009. Under the agreement, Ukraine was to buy 40 billion cubic meters of gas per year. From 2010, the volume rose to 52 billion cubic meters annually. However, since 2012, Naftogaz has ceased buying the contracted volume, and stopped buying Russian gas entirely in November 2015, replacing it with reverse gas supplies from Europe.
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