Ukraine GTS costs US$1 bln a year to maintain, operator says.

REUTERS

REUTERS

The operation of the Ukrainian gas transmission system (GTS) requires significant funds, nearly US$1 billion a year, says CEO of LLC Gas Transmission System Operator of Ukraine (GTSOU) Serhiy Makogon.

"The Ukrainian GTS is a very complex, powerful and unique infrastructure that requires significant funds for daily operation. About US$1 billion a year," Makogon wrote on Facebook.

The official added that maintaining such infrastructure becomes economically inviable without a long-term "ship or pay" transit contract.

Read also Russia to sever gas transit to EU via Ukraine if Nord Stream 2 launched – Zelensky "Therefore, we reiterate the fact that transit capacities of the Ukrainian GTS may be freely booked for the next 15 years at an annual auction, which will take place on July 5. We invite everyone to take part," he said.

Background

  • On December 30, 2019, Ukraine and Russia signed a contract for gas transit to Europe for a period of five years, allowing for further prolongation for ten years.
  • The document obliges Russia's Gazprom to transmit through Ukraine a minimum of 65 billion cubic meters of gas in the first year and 40 billion cubic meters – in the next four years.
  • In 2020, gas transit through the Ukrainian gas transmission system decreased by 38% on year, to 55.8 bcm. In 2019, gas transit via Ukraine amounted to 89.6 bcm, in 2018 it stood at 86.8 bcm, and in 2017 – to 93.5 bcm.
  • In 2020, Ukraine's revenues from gas transit amounted to about US$2.1 billion.
  • The Nord Stream 2 project envisages the construction and operation of two gas pipeline branches with a total throughput capacity of 55 billion cubic meters of natural gas per year from the coast of Russia through the Baltic Sea to Germany. It should connect Russia's Ust-Lug and Germany's Greifswald.
  • Russia's natural gas giant Gazprom is the founder of Nord Stream 2 AG.
  • The project is being financed by European companies – France's ENGIE, Austria's OMV, Royal Dutch Shell, as well as Germany's Uniper and Wintershall.
  • The Nord Stream 2 gas pipeline has already been completed by more than 90%. The construction of the pipeline was expected to be completed before the end of 2019.
  • Earlier, speaking in an interview with Germany's Frankfurter Allgemeine Zeitung on May 29, 2021, Ukrainian President Volodymyr Zelensky said that involvement of partners from Europe and the United States as co-owners of the Ukrainian gas transmission system would preserve transit supplies of Russian gas through Ukraine and security in the region.

Translation: Kanaryan Lyudmila

Unian

Read the top-news of politics in Ukraine and the world, the latest political news from the UNIAN news agency.

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