Ukraine searching for new solutions to energy problems
The launching of this project was overshadowed by one unpleasant thing: one of the supposed contractors said that he had not signed the contract. Meanwhile, the Ukrainian authorities say that not only Ukraine’s full independence from Russia will be achieved by 2018 but also gas supplies to Europe will start by that time. Experts are skeptical about these plans though.
A big energy tour of the Ukrainian leadership was completed in Norway on Friday, November 30th . Speaking within the framework of the bilateral business forum, Ukraine’s head of government Nikolai Azarov said a few words about Kyiv’s large-scale gas projects. He began with the unveiling of the plans for the extraction of shale hydrocarbons: 30 billion cubic metres annually for the coming 10 years. Azarov also mentioned the joint project with Shell for the development of the Black Sea shelf. Besides, Kyiv said that it is willing to get involved in the transportation of the Azeri gas to Europe. For this purpose, the Trans-Anatolian Gas Pipeline (TANAP) will be launched in 2018. Ukraine proposes to use its own gas storage tanks – to balance supplies, as its says. All these initiatives seem to be reassuring because all statements are being made on the government level. However, the situation is not very simple in this field, an investment analyst, Valery Nesterov, said in an interview with the Voice of Russia:
“On the one hand, the prospects for Gazprom are not very optimistic, but if we analyze the situation more carefully, we will see that Kyiv is bluffing . The situation is not quite clear, and possibly, it is linked to corruption, taking into account a scandal with the Spaniards, or with companies like Shell . As you know, the earlier concluded production sharing agreements on the shelf have not been signed yet. The prospects opening for the shale gas have not been proved yet. Poland is not very optimistic about gas-and-coal layers either. Ukraine is experiencing difficulties on its way towards energy independence.”
True, Kyiv is not making an easy choice. Experts find surprising Kyiv’s initiative to transport LNG from Norway. This initiative was also discussed Friday. Norwegian energy companies, in fact, are ready for cooperation. The problem is that a direct gas pipeline leading from Norway to Ukraine is non-existent so far – therefore, the fuel and its transportation will cost Kyiv a lot, Valery Nesterov says.
Kyiv believes that natural gas for the LNG terminal will arrive from the USA, Turkey, Azerbaijan, and Qatar. For this purpose Ukraine’s President Viktor Yanukovych went to Doha. On November 28th he said that Qatar would become one of the main suppliers of LNG to Ukraine, and the latter will pay in barley and wheat for gas supplies.
The fact that Kyiv is searching for fuel supplies, acting with determination and ignoring consistency is explainable. The construction of the South Stream gas pipeline will start in a week. After it is completed in 3 to 4 years’ time, Kyiv’s main trump card at the talks with Moscow and its main financial source – gas-transport system – will be of no need for whoever it might be. However, we are well aware of the fact that Moscow has never threatened Kyiv with closing the gas tap. And it is not Moscow that is finding all kinds of pretexts for refusing to discuss the gas price. At the moment, instead of giving a boost to bilateral cooperation Ukraine’s leadership is giving preference to expensive projects.
As it appears, Kyiv wants to think neither about financial nor about reputation damage. We should mention a scandal that broke out when the construction of the ill-famed LNG terminal started. The signing of agreements with the investors, where Nikolai Azarov was in attendance, took place on November 26th, and 2 days later Spain said that it did not have any information about the person who signed the contract on the company’s behalf.