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Russian gas transit through Ukraine fell by almost 40% in 2020

Russian gas transit through Ukraine fell by almost 40% in 2020

Gas transit from Russia through Ukraine in 2020 was reduced by 38% and amounted to 55.8 billion cubic meters. That is the lowest figure in the last 30 years, said the head of the company "Operator of GTS of Ukraine" Sergey Makogon.

"In 2020, Gazprom reduced transit through Ukraine by 38%, to 55.8 billion cubic meters. On the one hand, Gazprom paid for capacity in the amount of 65 billion cubic meters because Ukraine has achieved the presence of the "pump or pay" norm in the contract. On the other hand, this is the lowest figure in the last 30 years. With the projected capacity of the gas transmission system at 146 billion cubic meters of transit, this means that the GTS is loaded by less than 30%," Makogon wrote in a column for the publication "Economic Truth," published on Wednesday.

According to him, the threat to Ukrainian transit is not only the Nord Stream 2 pipeline: Gazprom is actively completing new bypass gas pipelines in Southern Europe.

"In 2020, the first stage of the Turkish Stream was launched,... in 2021, it can enter the project mode of operation (the second stage-ed.) of the Turkish Stream... along with its extensions through Bulgaria and Serbia. This could lead to a loss of transit of 15 billion cubic meters-volumes that previously went to Hungary, Serbia, and Croatia," Makogon said.

He added that in the current situation, the key tasks of Ukraine for the next five years are to optimize the gas transmission system in accordance with the needs of the market and search for new opportunities for additional loading of the GTS or reduce costs with the existing one.

At the end of December 2019, Russia and Ukraine signed a package of agreements on the continuation of gas transit through Ukraine, including a transit contract for five years, according to which Gazprom guarantees the pumping of 65 billion cubic meters of gas in the first year and 40 billion in the next four. These agreements ensured the continuation of transit from January 1 after the expiration of the previous contract.

Also, according to the protocol on gas cooperation, Gazprom and Naftogaz may consider direct gas supplies to Ukraine at a discount from the price of the European hub (NCG), depending on the volume. However, no such negotiations have been reported so far.

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