Russia’s Gazprom will need Ukraine’s gas transit pipelines for four more years
Thursday, July 5, 2018

Russia’s Gazprom will need Ukraine’s gas transit pipelines for four more years

Russia’s Gazprom will need Ukraine’s gas transit pipelines for four more years, Roland Götz, a German gas expert, predicts to Deutsche Welle. U.S. sanction threats, questions over Danish permits, and construction hurdles will delay full operation until 2021, he calculates. To replace the Russia-Ukraine gas deal that expires in 18 months, Naftogaz should negotiate with Gazprom a short term transit contract to cover the 2020-2024 period, he advises. Naftogaz should lock in transit volumes of 30 to 40 billion cubic meters per year, less than half the 93.4 billion cubic meters that Russia pumped through Ukraine last year. In company to company talks, Naftogaz should stress that its reservoirs and pipelines can help Gazprom ride out gas price volatility. The German concludes: “Ukraine will only win if it ensures that as much Russian gas as possible is being pumped through its pipelines for as long a time as possible.”

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