Ukraine plans to break Gazprom's monopoly

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Ukraine plans to sign a contract with Germany's RWE energy company to import gas through Slovakia using reverse-flow technology. Although relatively small, the project is the first attempt by Ukraine to reduce its dependence on imports from Russia's Gazprom monopoly.

Ukraine wants to purchase three million cubic meters of gas from RWE per day, Ukraine's Zerkalo Nedeli weekly reported.

"NaftogazUkraine plans to sign a short-term contract with Germany's RWE to deliver spot gas, bought in Europe, through Slovak pipelines to Ukraine. The signing is likely to happen in the nearest future," says the report on the newspaper's website.

According to the draft contract seen by Zerkalo Nedeli and to comments by specialists, the agreement is seen as "balanced" and unlike similar deals with Russia, it does not contain "excessive" conditions.

The newspaper also reported that Ukraine held talks with Turkey and Bulgaria to deliver liquefied natural gas from Turkish storage facilities through the Bulgarian gas transportation system.

Turkey and Bulgaria see no objection to the scheme, the report says. Bulgaria has reportedly laid down a parallel gas pipeline to the one used to bring Russian gas, which could allow reverse flows to Romania. Ukraine and Romania would have to agree on pipeline route to serve the Ukrainian market.

Gas price talks between Ukraine and Russia have dragged on for more than a year without tangible results.

Previous disputes between Russia in Ukraine have briefly disrupted gas supplies to Europe, prompting both Gazprom and the European Union to look for alternative transit routes such as the Nord Stream pipeline launched last year and the planned South Stream pipeline project. [more]

Positions: 

Ivan Matiyeshyn, co-founder of the Ukrainian Foundation for Democracy “People First” said that the "intention of Ukrainian leadership to conclude a contract with RWE look doubtful as the supply of the indicated volumes won't change the situation significantly".

"Neither spot, nor liquefied gas is capable of overlapping all the needs of Ukraine and, what's more important, it can't have any influence upon the change of the price of Russian gas.  Gazprom will remain the basic gas supplier of Ukraine in the coming years. That's why Russia will hardly make concessions only due to the fact that Ukraine has got another supplier with such insignificant volumes. 

It would be more reasonable to concentrate on the issue of creation of a consortium which would consist of effective shareholders. Unfortunately, Ukraine can't consider itself a strong international player.  Therefore, in terms of energy-carriers diversification, Ukraine should concentrate on its own extraction and introduction of energy-saving technologies.  And the Ukrainian leadership should be interested precisely in the European experience in the first place."

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