Ukraine in desperate search for gas
Kyiv is equally interested in gas supplies from Norway, Qatar and any other country. Ukraine’s latest attempts to find an alternative to the Russian energy supplies result in absurd situations doing even more harm to Kyiv`s image.
Vladimir Makoukha explained that when the TANAP is ready in 2017-2018, at least part of the supplies coming from the Shah Deniz gas field in Azerbaijan could be placed in underground storages in western Ukraine to balance the supplies to Europe through the TANAP. Mr. Makhoukha was visiting Oslo in a delegation led by Prime Minister Nikolai Azarov. The visit was expected to offer Ukraine some opportunities of buying the LNG from Norway. Another alternative source of gas for Ukraine is Qatar. While in Qatar on November 28 President Viktor Yanukovych announced that a working group comprising delegates from Ukraine, Qatar and Turkey was considering an opportunity to deliver the liquefied gas from Qatar to Ukraine in exchange for Kyiv`s wheat and forage barley. But here Ukraine again faces a difficulty of finding a LNG terminal where it could store the fuel.
The construction of a LNG terminal has begun in Odessa earlier this week. The event was overshadowed by a scandal which put Kyiv in an awkward situation. The head of Ukraine’s state investment agency, Vladislav Kaskiv, in presence of Prime Minister Nikolai Azarov and Energy Minister Yuri Boiko signed a $1.1 billion gas deal with Spanish Gas Natural Fenosa company which was represented by Sarda Bonvehi, who was not authorized to sign anything with Kyiv. Ukraine, however, did not seem to be concerned much about the failed deal and agreed a lease of an offshore LNG terminal with the U.S. Excelerete Energy. It means that Kyiv has been actively looking for new energy partners that would replace Russia, says Roman Larionov of the Centre for Political Technology. He believes that Russia should mind the issue and find a compromise with Kyiv on gas prices.
One should mention, however, that Moscow has not threatened to stop gas deliveries to Kyiv. Secondly, Russia will easily find another gas consuming country to replace Ukraine, if needed. The British Petroleum (BP) is currently in talks with Russia’s energy giant Gazprom to join the construction of the Nord Stream`s leg which would connect Russia’s Leningrad district and Greifswald in Germany under the Baltic Sea and later to Britain’s Norfolk. Both the UK and Russia are interested in such kind of cooperation.
President of the Centre for System analysis and forecasting, Rostislav Ishchenko, believes that Ukraine’s attempts to find alternative sources do not meet the nation`s economic interests. “Ukraine’s parliament speaker Vladimir Litvin has recently said that unless the EU does not agree to cooperate, Kyiv will join the Customs Union with Russia to meet Ukraine’s economic demands. It means that now these are not our economic interests which we are choosing to worry about. Kyiv expects that when Russia sees that Ukraine has found other energy partners it will – within three years or so -lower gas prices for Kyiv.”
Meanwhile, Mr. Ishchenko thinks that Ukraine’s gas transportation system has only 3-4 years left before the first leg of the South Stream pipeline is commissioned. The collapse of the country’s gas transportation system will mean a total economic decline for Ukraine, its exports relying entirely on gas.