November 17, 2017

We Guarantee the Transit of Russian Gas with Plenty to Spare

Bohdan Sokolovskyi

In October (the 15th), as a rule, the season for gas pumping in the UGS is completed. Its reserves in the UGS, among other things, are a guarantee of uninterrupted transit of Russian gas to the EU. Earlier, in the Soviet times, Moscow demanded that at the end of the so-called pumping season Ukrainian underground gas storage facilities had at least 17 billion cubic meters of gas. The European Commission’s experts stuck to this figure too. Transit functioned, and nobody in the East or in the West was concerned about its conditions and gas consumption, in particular, nobody thought that the vast majority of European gas consumers had already introduced and mastered energy-saving technologies. And so it continued in the time of independent Ukraine — both the supplier and consumers demanded from the Ukrainian side that at least 17 billion cubic meters of gas would be in the UGS. And those of us who made the decision did not go into all this, and only tried not to offend either the Eastern or the Western partners. At the initiative of the RF, the mentioned minimum would often be raised to 19 billion cubic meters.

Accidentally the last year's heating season was an exception, when the winter was, to put it mildly, not the warmest. It is important that during the latest heating season (2016–2017) there was no interruption in the transit of Russian gas to the EU countries, although at the end of the pumping season in Ukrainian UGS there were about 15 billion cubic meters of gas. Only 15… Such a modest filling was not planned in advance, but most likely it happened because of a number of objective circumstances. And practically nobody has expressed claims.

So what for in 2017–2018 heating season do we need 17 billion cubic meters of gas, not 15, as it was in the cold winter of 2016–2017 (that is, by 2 billion cubic meters more)? That's a lot of money.

Now, when about 17 billion cubic meters of gas are in the UGS, it is possible in this connection to make, among others, two main generalizations:

— on the one hand, there are not enough arguments to logically, comparing with the last year, to justify these extra 2 billion cubic meters of gas in the UGS;

— on the other hand, if those who decide on the filling of the UGS have calculated that next year the price of gas in the international market will be so high that the current overpayment is worth it, then one can ascertain their economic prudence.