Ukraine Needs Transit Guarantees from Russia and EU
The deputy CEO of Ukrainian gas company Naftogaz, Vadym Chuprun, has said that Ukraine needs guarantees from Russia and the EU for gas transit and gas volumes supplied to the country from Russia.
In a press release issued on Naftogaz's website, Mr. Chuprun said that Ukraine could not ensure the security of its gas supply without Russian imports.
"It is impossible to preserve and maintain our gas transport system without Russian gas," he said. "Our national property -- Ukraine's gas transport system -- must be preserved, so it needs guaranteed volumes of gas. We need guarantees from Russia and from the European Union."
Mr. Chuprun said that Ukraine had the infrastructure for gas transit and supply, but that cooperation from the EU and Russia was necessary to ensure a good working relationship with definite roles for each party.
"It can be used only at the trilateral level, with Russia being a supplier, Ukraine a transit country, and the European Union being a consumer, on such a solid basis."
The executive also expressed surprise that the European Commission had not made any comment on Russia's commencement of the South Stream pipeline project, saying he took the silence as a sign that the EU was in agreement with the project.
"It surprises us that European officials have not reacted to this, and we regard their silence as a sign of agreement," he said. "That's why such a position doesn't make sense to us, especially knowing that the position was straightforward: the European route is the Nabucco gas pipeline. Even European Energy Commissioner Gunther Oettinger talked about this. And now there is silence."
He also advsied caution to those countries who were greeting the construction positively, saying that costs may be prohibitive in the future.
"The cost of South Stream today looms at $27 billion. For the sake of the short term, this may be beneficial for individual European countries, since they could receive preferences on gas prices today. But we need to remember that within five years they will need to pay transport costs for South Stream -- I'm afraid to even name a figure for the cost of gas."
A senior engineer for transit company Ukrtransgaz, Ihor Lokhman, said that Ukraine could construct a similar project for a much lower cost long-term.
"The Ukrainian side has put forth its proposal regarding efficient use of the southern direction with the Ukrainian gas transport system," he told a news conference yesterday. "With the Ukrtransgaz system's existing infrastructure and minor capital investments, we are capable of providing up to 45 billion cubic metres (bcm) of natural gas to countries in the Balkans area.
"This is a more economically beneficial transit corridor than to build the main South Stream gas pipeline at the bottom of the Black Sea for quite a lot of money."