Naftogaz Warns of Loss of Transit Revenue

Allowing Gazprom to use 80%, rather than 50%, of the Opal pipeline will hit Ukraine's finances hard, the CEO of state monopoly Naftogaz Ukrainy Andriy Kobolev warned October 27. It will support Russia’s plans to destroy Ukraine’s gas transmission system as a competitor in the delivery of gas to the EU consumers, he said in a statement.

The 36bn m³/yr Opal gas line brings gas from Nord Stream south from the northern German coast to the Czech Republic. Owing to fears of market abuse, Gazprom has only been allowed to use half the capacity.

In a statement Kobolev said he hoped that the European Commission's reported decision this week complied with European Union energy regulations. These include Article 36 of Directive 2009/73/EC concerning common rules for the internal market in natural gas, as well as the EU acquis on competition, which prohibits abuse of market dominance.

Nord Stream lands at Greifswald

(Credit: Nord Stream AG)

Ukraine is not itself a member of the EU but it expects that the European Commision’s decisions are fully coherent with the rules and principles of the Energy Community, of which Ukraine is a member: and are directed at achieving the organisation’s fundamental goal to unite an energy independent Europe.

If an additional 30% of Opal capacity is made available to Gazprom, the transit volumes are expected to shrink by 10-11bn m³/yr resulting in lost revenues for Naftogaz $290-320mn, "based on the old tariffs." Should Gazprom get access to an additional 40% of Opal capacity, as has also been reported, the transit volumes will drop by 13.5-14.5bn m³/yr with Naftogaz’ transit revenues falling by $395-425mn/yr.

William Powell