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Reverse Gas Supply May Stimulate Adequate Pricing of Russian Import - Ukraine's Energy Minister

July 5, 2013

The total annual volume of gas that can be delivered through the reverse supplies from Europe to Ukraine can reach 30 billion cubic meters. This, however, does not eliminate import of Russian gas, but can stimulate adequate pricing, said Minister of Energy and Coal Industry of Ukraine Eduard Stavytskyi during a recent press conference at the Cabinet of Ministers of Ukraine.

Having analyzed all gas transportation routes, where switching to reverse mode is possible, Ukraine can diversify 100 percent of its gas import. Nevertheless, the country cannot completely abstain from buying Russian gas because the northern neighbor remains the strategic partner, stressed the energy official.

In 2013, Ukraine plans to import 27.3 billion cubic meters of natural gas including 1.3 billion cubic meters in reverse supplies from the German gas trader RWE Supply & Trading. According to the minister, the price of Russian gas for Ukraine in the third quarter of 2013 will reach USD 400 per thousand cubic meters. Comparatively, the price of gas purchased in Europe and supplied through reverse routes ranges between USD 340 to USD 370 per thousand cubic meters, he concluded

Lately, Ukraine has been developing reverse gas routes from Hungary, Poland, Slovakia and Romania. Ukraine started purchasing gas in the EU in November 2012. On May 15, it started importing gas from Slovakia in a test mode. At this point, Ukrainian government expects to sign a contract for the supply of 7 billion cubic meters of natural gas per year through Hungary and Slovakia, reducing import from Russia to 20 billion cubic meters. Slovakia is believed to be the main gas transporting corridor from the EU to Ukraine.

Notably, the Ukrainian gas transporting company Ukrtransgaz has also signed a memorandum with the Romanian SNTGN Transgaz regarding daily supplies of up to 5 million cubic meters of gas from Romania.

Earlier, Vice Prime Minister of Ukraine Yuriy Boyko said that the increase in reverse gas supplies from the European Union was one of the strategic challenges Ukrainian government was facing. Reportedly, investing extra efforts into diversifying Ukraine's energy sources may prove effective in gaining independence from expensive Russian gas.


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