Why eurobased not very much count on Ukrainian GTS

“Gas corridor” between Poland and Ukraine allows to transport 1.5 billion cubic meters per year, but uploaded it to 65%. The Interconnector between Poland and Ukraine plan to start building in 2020 will Cost the European gas transportation system without Ukrainian? Do the Ukrainian GTS in the plans of evrosouza?

Reverse route to Ukraine opened Poland. The operator of the gas transportation system (GTS) of Ukraine “Ukrtransgaz”, adopted imported “Naftogaz” of natural gas from Polish operator Gaz-System on 1 October 2012. Since then, Ukraine from/through Poland delivered 3 billion cubic meters of gas. Poland was and remains the first among the countries, including the Visegrad four, with which Ukraine is trying to establish a mutually beneficial and continuous “gas” relations. But…

Russia increasingly seduces European Union, “the Turkish stream” and “Nord stream-2”. Europe does not want to admit that actually contributes to its gas dependence from the Kremlin and “Gazprom”. Ukraine remains “outside” the European gas system. Despite the fact that our gas transport system, even in the last three difficult for Ukraine (annexation of Crimea, the war in the East of the country), member States of the EU seamlessly has received 60-79 billion cubic meters of transit “Gazprom” gas.

Today “gas corridor” between Poland and Ukraine allows to transport 1.5 billion cubic meters of gas per year. This route is loaded on 65%. Gas transportation companies of Poland and Ukraine signed the operator agreement.

For comparison: “gas corridors” from Slovakia and Hungary can be transported to Ukraine annually 15.5 and 6.1 billion cubic meters, respectively.

Poland and Ukraine although they act in unison, but each in its own way.

Poland relies on the EU, in particular for financing infrastructure, especially gas. Today can afford to say: “Poland opens the “North gate” for the liquefied natural gas from the United States.”

As reported ZN.UA June 7th, 2017 in the Polish LNG terminal świnoujście, came the first tanker with liquefied gas American, although the ceremonial adoption took place on 8 June. All Ministers, including the Prime Minister of Poland, these days were busy with the reception of the first tanker with liquefied gas from the USA. Given the beginning of the problems with Qatar, for them it was extremely important. About it ZN.UA Deputy energy Minister of Poland Michal Kurtyka during the Second Polish-Ukrainian gas conference in Warsaw on 6 June.

The energy Minister of Poland and head of the company-transmission system operator Gaz-System continue negotiations with suppliers of liquefied natural gas in the United States to the first trial supply of 100 million cubic meters was not the last one.

This is the first American gas supply not only for Poland but also for Northern Europe. By this time American LNG fell exclusively on the markets of southern Europe, particularly Spain, Italy, Portugal and Turkey. In July it is expected the arrival of the second tanker with American LNG in świnoujście. And in the future its delivery through the territory of Poland can be extended to the South and East of Europe, including in Ukraine. This was stated by Deputy energy Minister of Poland M. Kurtyka.

In his opinion, “is expected to start implementing a long-term strategy of Poland, the operator of its transmission system Gaz-System and PGNiG gas holding company, co-owner of GTS Poland, to create a regional gas hub”.

Thus, the Polish side does not consider the Austrian hub Baumgarten hub as such because there are only gas “Gazprom”. Where is the competition of producers and suppliers?

“Poland welcomes Ukraine’s participation in the created European regional hub,” — said Deputy Minister of energy of the Republic of Poland. But obviously not in a hurry to use the Ukrainian gas transport system and its underground gas storage facilities. Why?

In an interview ZN.UA Deputy Chairman of the management Board of PGNiG Maciej Wozniak said, “Every country would have its hub — regional shopping platform, in particular for determining gas prices in the region which is likely to be below market. But to create a hub of necessary infrastructure. Poland systematically developing the infrastructure: plans to increase the capacity of LNG terminal from 5 to 7.5 billion cubic meters of gas, the ability to control the gas pipeline transportation, storage and operational management”.

The question ZN.UA interested whether Poland to increase gas opportunities — the establishment of the Interconnector with Ukraine, Wozniak replied, “Interested. We are a few years about negotiations with NAK “Naftogaz of Ukraine” and the operator GTS “Ukrtransgaz”. From our side need a little to finish about 1.5 km of pipeline. We are ready to do it, as soon as the Ukrainian side will be determined with the construction on their side of the 110 km of the pipeline”.

Vice-President of PJSC “Ukrtransgaz” Sergey Makogon said that as soon as UTG as state-owned companies will allocate resources so soon… When? Won’t it be too late? The EU will complete the interconnectors, LNG terminals and… Ukraine will remain outside of European gas transportation system forever.

Help ZN.UA

LNG-terminal (the LNG terminal). Lech kaczyński, on the Baltic coast in Swinoujscie, began work in June 2016 the capacity of the terminal is 5 billion cubic meters of gas. For Poland and GTS operator — the company Gaz-System this was the beginning of a real diversification of supply routes and sources of gas. Poland intends to increase the capacity of the LNG terminal of 2.5 billion cubic meters of gas.

In 2016, the imports of liquefied gas totaled about 1 billion cubic meters (see table. 1, 2), in the first five months of 2017 — 0,62 billion.

Poland intends to create and open a “Northern gate” to supply liquefied natural gas through the LNG-terminal on the North-Western coast of the country, as triggering the existing pipeline infrastructure and interconnects (connecting gas pipelines with neighboring countries and gas transmission companies) and created a pipeline Baltik Pipe for transporting gas from Norway.

According to the Commissioner of the government of Poland concerning infrastructure Peter Naimski, Polish gas state company PGNiG has no plans to renew expiring in 2022 long-term contract with Gazprom.

Expert Svetlana Dolinchuk said that at the ceremony of the first tanker with LNG to the Prime Minister of Poland Beata Szydlo has promised to continue the policy of diversification of energy imports. “This is a symbolic moment that will go down in history… We can now confidently say that Poland ensures the safety of not only our own but also our neighbours-partners,” she said.

Energy Minister of Poland Krzysztof Tchorzewski predicted that the development of imports of liquefied natural gas will strengthen the position of Poland in Central and Eastern Europe will strengthen the country’s role in the provision of gas.

The President of PGNiG Piotr Wozniak said only that the volume of the first delivery of LNG is about 100 million cubic metres is a small amount even for the Polish market, which annually consumes 14 billion cubic meters of gas. “But energy security is based on a series of such supplies”, — he said.

Vice-President of the PGNiG Maciej Wozniak assured that the American gas bought at “attractive price” that is lower than the price of Russian gas for Poland under the contract with “Gazprom”.

Peter Wozniak said: “We are in constant negotiation with gas suppliers throughout the world. Our sales Department is very active. And especially its activity increased after the opening of trading office in London. The decision we took almost the same day, when it was announced a Brexit. But this is an important step. In addition, other traders did not intend to leave London because of Brexit remains a key centre of LNG trade in the world.”

The U.S. Department of state issued a special statement in which it welcomed the commencement of us exports of liquefied natural gas in Poland, and noted the special role of Warsaw in the diversification of energy supplies to Europe. The statement noted that such cooperation supports the creation of new jobs in the United States, contributes to lower energy prices in the countries-consumers of American LNG, thanks to the “reliable and stable market partnerships”. Washington is also counting on the development of “tight gas cooperation” with the EU, which would be not only in the saturation of the market with American fuel, but also in the construction of new infrastructure to import it.

On the eve of the arrival of the first shipments of us LNG in świnoujście, the head of PGNIG Piotr Wozniak held talks with the administration of the tramp and was pleased with their results. “The United States are set up favorably in the prospects of our cooperation. We are interested gradually develop direct contracts with sellers of LNG from the United States and to increase the volume of purchases is in conformity with the policy of our company to diversify sources of supply, through which we strengthen the energy security of the state. In the future, we expect to move from short-term to medium-term contracts to tankers from the United States came to the Polish market regularly and complement those long-term supplies, which come from Qatar,” — said P. Wozniak.

He also noted that the current long-term contract with PGNiG Qatargas continues to work steadily without any changes, despite the complicated foreign policy situation in Qatar, because of suspicions in this country of supporting terrorism. “We work well with Qatar,” said Peter Wozniak.

“In the future we are interested to use any reserved power to exclude unreasonable costs,” — said Vice-President of PGNiG, said Wozniak. According to him, the capacity will be in demand through long-term contracts already signed with Qatargas and procurement on the spot markets. “We care about good relations with our partners in Qatar,” he said.

“LNG supplies from the US to Poland affect the interests of Russia. This can lead to increased activity of the Russian special services, which will provoke the information war to discredit plans to reduce dependence on Russian gas”, — said the former head of the intelligence Agency of Poland Grzegorz Malecki.

Agreement with Cheniere Energy improve Poland’s position in negotiations with other gas suppliers and encourage competition among exporters on the European market, where long time was the leader of “Gazprom”. Therefore, Russia seeks to actively promote the project “Northern stream-2”, to keep their customers in the EU on the background of the LNG revolution, which threatens the interests of the Kremlin and its partners.

By the way, the energy Minister of Lithuania, leader of vicunas confident that the controversial pipeline “Nord stream -2” should not be legislative exceptions. He finds it impossible special interpretation of legal norms in the implementation of this project.

After 2022, the expiration date of the long-term contract, PGNiG with Gazprom, Warsaw intends to abandon the Russian gas. Strategic direction to import natural gas should be the North Gate project with a capacity of 10 billion cubic meters of gas per year. It will connect the Polish gas transportation system from fields on the Norwegian continental shelf in the North sea. The new route involves the transit of gas through Denmark to the Polish port of Niechorze on the Baltic sea. And then through the Polish GTS Norwegian gas will be able to reach consumers in Ukraine, the Baltic States, Hungary, the Czech Republic and Slovakia.

To ensure the viability of this route, the following year, Warsaw and Copenhagen are planning to start construction of the gas pipeline Baltic Pipe, which will become part of the North Gate. A Memorandum on the implementation of this project, the Prime Minister of Poland Beata Szydlo has signed with his Danish counterpart Lars Rasmussen on June 9, the day after the first tanker with an American liquefied gas arrived in Poland.

To build Baltic Pipe will be two companies — the Polish GAZ-System and the Danish Energinet, which have yet to agree on a business plan and determine the cost. But they have already enlisted the support at the governmental level in order to be commissioned this strategic project by October 2022.

On the eve of the signing of the intergovernmental Memorandum of GAZ-System and Energinet announced the beginning of the Open Season procedure for potential gas suppliers in the framework of the project Baltic Pipe. This will allow us to determine the level of long-term market demand for capacity of the future gas pipeline, as well as a preliminary assessment of the social and economic benefits from its operation. All these data are important for the preparation of a feasibility study of the project Baltic Pipe, which is funded by the European Commission in the framework of the CEF (Connecting Europe Facility).

Open Season will be held in two stages. The first phase started on June 6 and will end a month and a half, 25 July, 2017 during this period are expected, as preliminary bids from gas suppliers for fill capacity of Baltic Pipe. During the second phase of the Open Season, which is tentatively will begin on 5 September 2017, they will be able to confirm your application and to adjust the final volume.

The Baltic Pipe gas pipeline for transportation of Norwegian gas is a competing project to the “Nord stream-2”, which intends to build Gazprom to increase deliveries of Russian gas to Germany via the Baltic sea. “The implementation of the “Nord stream-2″ violates the economic interests of Poland, Ukraine, Baltic States, Central Europe, because it prevents the development of competition in the gas market, increased dependence on Russian gas and threatened the EU’s energy security,” says Jiri Corella from Instytut Staszica, a former top Manager of PGNiG and Tauron Polska Energia.