Analyst: increasing the price of transit of gas threatens a new crisis

Analyst: increasing the price of transit of gas threatens a new crisis

The rate increase is another proof that Ukraine is not constructive partner, who tends to the breach of obligations, said the Deputy Director of the Russian national energy security Fund Grivach.

MOSCOW, 31 Dec. Increasing rates of Ukraine for the transit of Russian gas to Europe once again proves the unreliability of this country as a transit country, but also can be a reason to start a new gas crisis and the interruption in the supply of “blue fuel” to the EU, said Deputy Director of the Russian national energy security Fund Alexei Grivach.

Director of business development of the company “Naftogaz of Ukraine” Yuriy Vitrenko on his page in Facebook said on Wednesday that Ukraine has drastically enhanced the rate of tariff for transit of Russian gas through its territory, but did not give specific figures.

Later, Naftogaz issued a statement that suggested “Gazprom” to negotiate in connection with the adoption in Ukraine of new rules of pricing on services of gas transportation.

The transit rate up to this point was 2.7 dollars for transportation of thousand cubic meters per 100 kilometers. The Ukrainian side has stated that she wants to raise that bet to $ 5. Also in Kiev has repeatedly stated that the agreement between Ukraine and Russia on gas transit to Europe would be renewed after 2019, as the alternatives to the Ukrainian route no. For its part, Gazprom is working on the construction of the offshore pipelines to bypass Ukraine.

Contrary to the contract

“This (increase transit rate — ed.) more proof that Ukraine is not constructive partner, who tends to the breach of obligations not only by some “gentlemen’s” agreements and contracts. After all, they are going to increase the transit rate, which is contrary to the contract. That is, Ukraine proves that she is an unreliable transit country,” — said Grivach.

“In the contract clearly spelled out the formula, how is the transit rate for the next month, it is tied to the rate of the previous period, to tax fuel, inflation, and other Such actions as the establishment of a new order by the government of the Ukraine, in an international contract for the transit between “Gazprom” and “Naftogaz” no,” said the expert.

The national Commission, carrying out state regulation in the spheres of energy and communal services of Ukraine (CREATED), established on 29 December, tariffs for services in gas transportation on cross-border pipelines for points of entry and exit. As noted in the message “Naftogaz”, if the cost of services on transportation of transit gas was not regulated by the state and is determined only by the company’s contract with “Gazprom”, it is now appropriate tariffs are determined CREATED.

These powers were received by the Commission in accordance with the adopted in the spring of 2015 the law “On natural gas market”, which was introduced in Ukraine the norms of the energy legislation of the European Union. These standards require fundamentally different approaches to setting tariffs for transportation.

So, instead of negotiating procedures and determine the cost of transit depending on the volume and distance that gas is transported, the new tariffs must reflect agreed by the regulator, the costs of a transmission system operator, to apply for booked capacity (“ship or pay”), to be determined for all points of entry and exit of the national gas transport system, that is, with the use of similar approaches for gas transit and internal transport.

Naftogaz is currently reviewing new rules for the pricing of gas transportation, set CREATED, is spoken in the message of the Ukrainian company.

A new gas crisis?

Naftogaz assured that the transit of gas to European consumers will be carried out without hindrance. “We remain a reliable partner and reaffirm that the transportation of gas for European consumers will be frustrated in amounts due to contract”, — the press service quoted the words of the head of the Ukrainian state-owned companies Andrew Koboleva.

“The transition to generally accepted practice in Europe pricing for transit will contribute to the further integration of our gas transport infrastructure in the European power grid and enhance the reliability of gas supplies to the EU”, — said Korolev.

Retaliatory steps from Russia are unlikely, but the question is, how far Ukraine can go in this story, says Grivach.

“Next “Naftogaz” in accordance with its Ukrainian system will be considered on its own, “Gazprom” will pay under the contract, Naftogaz is to assume that he can underpay. Then they can through the court to prove something. This is one story which in fact does not threaten, in addition to additional trials in which the position of Ukraine will be even less strong than in other proceedings”, — said the expert.

He does not exclude that the Ukrainian authorities will decide on a more radical option. “They can say that they have underpaid, not paid for transit and to stop transit or to take away some of the gas as payment. This will lead to a full-fledged transit crisis. The consequences can be very sad for European buyers” — described Grivach this scenario.

However, he found it difficult to say which scenario is more likely. “The probability of some special artificial radicalization (situation — ed.) have, since Ukraine needs a tool of pressure not only on Russia but also on the EU in terms of receiving the money. In addition, I think there are forces interested in the escalation of the situation, to create risks for Russian gas deliveries to Europe and declare that these deliveries are unreliable”, — concluded the expert.