June 8, 2016

On Plans to Buy Gas from the Aggressor

Bohdan Sokolovskyi

Lately, one can often hear that last winter Ukraine did not use Russian gas, and that soon we may start buying gas from the Russian Federation, if it sells it cheaper than in Western markets (including transportation costs) for us. In the first case, of course, it was an important step to get rid of the dependence on the aggressor's gas.

However, in this case it is worth noting the following:

Firstly, in winter 2015/2016 Ukraine really did not buy gas from Russia, which is the aggressor. But till October 2015, we had been buying Russian gas, part of which was pumped into underground gas storage (UGS). After the cessation of imports from the Russian Federation, during the heating season, in addition to our own production and imports from the West, we were taking gas from UGS, which was partly imported Russian gas. Apart from the annual volume of gas sufficient without imports from Russia (first of all — by reducing consumption), last winter was “warm” and this was the reason that the daily gas extraction from these three sources was enough to satisfy all our customers. The volumes of daily gas extraction from each source, in total were technically limited. If the weather gets cold, there is only one technical ability to provide all customers — at the expense of imports from the Russian Federation. It is not surprising that the Russian side dictated us the price, and we agreed to it.

Secondly, the gas imported in 2015 from the West — through Poland, Hungary and Slovakia — was mainly of Russian origin. So, it is somewhat incorrect to say that in the last heating season Ukraine did without Russian gas.

We do need to try and achieve this, and we in our country Ukraine have all the reasons for it:

in particular, we need to reduce the volume of consumption, to increase our own production volumes, and to increase to optimal volumes (for when the winter is really cold) the physical abilities of daily gas withdrawal without Russian imports. But this is best done in warm season. Unfortunately, we seem to have wasted at least two months — this work should have been started in late March — early April, and the negotiations and preparation of technical documentation should have been started much earlier. We can just hope that such work (preparation, negotiations, etc.) is successfully being done in high secrecy, i.e., first of all it is not being covered by media:

we have contracted for, or are ready to sign contracts for the supply of non-Russian gas;

or we are bringing the daily extraction of gas to the optimum volume, which is sufficient enough for all consumers (and are conducting negotiations with the Russian Federation, mainly as a distraction, and only just in case).

The question: “Is it advisable to import gas from Russia during the war?” needs a separate analysis. History knows different cases: when the victim stopped all cooperation with the aggressor or when the aggressor and the victim cooperated in individual industries.

But when it comes to Russia, then in addition to the undisputed assertion that we should not finance the aggressor's army, it is advisable to be guided by Otto von Bismarck's words, that “... any agreement (treaty, contract, and so on) signed with Russia, is not worth the paper on which it is presented.”

So, Russia's promises about gas imports cannot be trusted, no matter what the declared price is. Especially — in times of war, as there is no guarantee that the Kremlin won't use gas as a weapon against Ukraine and won't stop the import exactly when to us it is most painful, and thus — most politically advantageous for Moscow.

Besides, only in case of termination of any cooperation with Russia, Ukraine can unequivocally require assistance from the world, in particular, introduction of full and wide-ranging political and economic sanctions against Russia.