American LNG and transit from Russia. What to expect

Американский СПГ и транзит из России. Чего ожидать

Ukraine prepares for gas confrontation with Russia

Washington, Kiev and Warsaw are expanding trilateral cooperation in the field of gas supplies. Gazprom is preparing to extend the contract with Naftogaz.

Ukraine and Russia with the support of the European Union are preparing to meet in September to discuss the contract for gas transit through Ukrainian territory. The government of Ukraine intend to pursue a long-term contract and form the position.

Meanwhile, preparations for the supply of American gas to Ukraine via the Polish gas transport system to reduce dependence on Russian gas. LNG is expected in November. Корреспондент.net tells details.


When Ukraine will receive the American gas

President Vladimir Zelensky has advocated diversification of energy supply sources and also “for energy cooperation in the triangle Poland – USA – Ukraine”.

He said at a press conference with his Polish counterpart Andrzej Duda in Warsaw on 31 August that the construction pipeline Nord stream – 2 is “unacceptable and pose a threat for the whole Europe”.

United States, Poland and Ukraine on this day in Warsaw, concluded a tripartite agreement on gas cooperation.

Signatures under the document have put the Minister of energy of the USA Rick Perry, Secretary of the NSDC of Ukraine Alexander danyluk and the envoy of the Polish government on the strategic infrastructure Piotr Naimski.

2021 Warsaw will be able to supply Kiev six billion cubic meters of natural gas annually, which is four times the current figure, said Naimski.

“We will make every effort to diversify gas supplies to Ukraine, which is currently totally dependent on Russian exports,” Naimski said at a press conference in Warsaw.

Rick Perry expressed hope that us LNG “can help another ally Ukraine to prevent the threat of reduction of Russian gas supplies”. He stated the need for building new infrastructure between Ukraine and Poland.

To facilitate this need Baltic Pipe gas pipeline, whose construction is scheduled for completion by the end of 2022, and also the expansion of the gas port in świnoujście.

According to forecasts Naimski, two years later, the power gas port in świnoujście will be extended by 50 percent to 7.5 billion cubic meters. Baltic Pipe – Poland and Denmark – will deliver up to ten billion cubic meters of gas per year.

Ukraine will be able to buy liquefied natural gas directly from the US or the Polish PGNiG. On the eve of the trilateral meeting, the group Energy resources of Ukraine signed an agreement with Polish oil and gas state company PGNiG on the acquisition and import to Ukraine of American natural gas.

“In early November under the agreement, the liquefied gas will arrive in the Polish LNG terminal… It goes to the Polish transmission system after re-gasification, and from there he will go to Ukraine via the gas communication in Hermanovice and be handed over to ERA. Delivery for the ERA will be made before the end of 2019”, – stated in the message of the company.

The bandwidth point, the Participants in the Polish-Ukrainian border is 4.5 million cubic meters a day, and now this volume is almost entirely chooses Naftohaz and other Ukrainian buyers.

But Ukraine also emphasizes the possibility of transit of American LNG to Romania, Moldova and Hungary.

According to Kommersant, the impending expansion of the terminal in świnoujście together with the construction of the Baltic Pipe gas pipeline from Norway with a capacity of eight billion cubic meters should cover the needs of Poland’s gas imports.

If Poland is planning to put a substantial amount in Ukraine, it will need to continue purchasing from Gazprom.

The publication also notes that at the current prices of LNG deliveries to Ukraine through Poland is much less profitable than the reverse.

Odnakovo Naftogaz in its draft financial plan, according to Ukrainian truth, in November and December lays the rates for the population at the level of 284,5 USD per one thousand cubic meters, and for industry – 296 dollars. Such a price level could allow ERA to earn even when buying LNG from the US.


To prepare negotiations on the transit of Russian gas through Ukraine

At the end of the year expires a ten-year contract for the transportation of Russian gas to Europe via Ukraine.

Not having signed a new contract, Naftogaz boosts gas reserves and is leading the upgrade of multiple compressor stations in case Russia again cut off gas supplies, as it was ten years ago.

Naftogaz and Gazprom with the participation of the European Commission to continue negotiations on the renewal of gas contracts. On 4 September it became known that Russia, Ukraine and the European Commission will soon agree on the date of the trilateral negotiations on supplies and transit of Russian gas through Ukraine to the EU.

“Upon returning from a trip from Vladivostok we and our colleagues will be in touch and will succeed; the time of holding such meeting. Prior to that we pre-agreed that such a meeting would be in September,” – said the head of the Ministry of energy Alexander Novak during the Eastern economic forum.

August 30, Prime Minister of Ukraine Alexey Goncharuk declared intention to achieve a long-term contract for Russian gas transit to Europe.

“Of course, we need to achieve a long-term contract on transit. You would need to work on,” he told reporters.

According to him, the government in preparation for the trilateral talks that prepares the position of the Ukrainian side.

“We deeply understand the situation occurring. Prepare for the negotiations. Form a bargaining position. So I don’t want to comment on it publicly,” – said Goncharuk.

On 2 September the new head of Ministry of Ukraine Alexey Orgel said that Kiev should finish the selection of the gas transportation system of Naftogaz and to enter the negotiations with Russia on gas transit to “full combat readiness”.

“Our priority is Naftogaz, unbundling, the signing of the agreement on the transit of gas… will Choose the best model, the fastest possible certification, we need to go into full combat readiness for talks with the Russian side”, – he said at a press conference.

In early June, Russia put the conservation of gas transit to the EU via Ukraine. Russian Prime Minister Dmitry Medvedev said that the new cooperation should be based on “normal commercial relations” and the absence of litigation.

Experts said that due to the delay of construction of the Nord stream-2 is necessary for Russia the contract on gas transit through the Ukrainian GTS. Detail in the material Корреспондент.net gas Transit: the Russian Federation has put forward Ukraine new conditions.

Later, the head of Gazprom Alexey Miller has threatened European gas consumers because of the expiry of the transit contract with Ukraine and Ukrainians – the loss of reverse of Russian gas from the European Union. However, experts say that the plan of Russia to leave Ukraine without a transit failed.


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