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Energy 25 January, 2019 9:00 am   
Editorial staff

Polish Briefing: We know the proposed deal on Ukraine and Nord Stream 2

What goes on in Poland on the 25th of January.

We know the proposed deal on Ukraine and Nord Stream 2

The media received information on proposals for regulating gas supplies through Ukraine after 2019, when the contested Nord Stream 2 gas pipeline is to be ready. The matter is commented by Madalina Sisu Vicari from the University of Liege.

The system proposed by the Commission is to guarantee a minimum level of gas supplies through Ukraine, which will guarantee its budgetary stability, and thus political stability. Without it, the Russians could redirect most of the supplies to alternative gas pipelines: Nord Stream 2 and Turkish Stream, which are to be built by the end of the year.

“It’s the maximum option”

– Not necessarily both will be ready in time, but at least one can already work at the time of concluding a possible agreement – says Vicari. The agreement proposed by the Commission assumes signing a new 10-year contract with guaranteed transmission at the level of 60 billion cubic meters per year with an additional flexibility of 30 billion cubic meters per year. – This is the maximum option, because it does not take into account Nord Stream 2 and Turkish Stream – indicates the researcher. Madalina Sisu Vicari recalls that in 2018 Russia sent Ukraine by an average of 87 billion cubic meters. A year earlier it was still 93,5 billion cubic meters.

“Russia will not be interested in a long-term agreement”

Gazprom broke off expert talks on the composition, so the meeting of politicians on January 21 did not bring any conclusions. The next will take place in May near the presidential elections in Ukraine (March) and parliamentary elections in the European Union (May). Vicari reminds that it means the possibility of changing the representatives of the European Commission and Ukraine in trilateral talks on the layout called the trialogue process.

– There is little chance of accepting an agreement before the election of a new European Commission and parliamentary elections in Ukraine in October – the researcher assesses. In her opinion, Russia will not be interested in a long-term arrangement, at least not too fast. – At best, the agreement will be signed at the end of the year, and the assignment is most likely next year – assesses our interlocutor.

In her opinion, the agreement will be short-term despite the Commission’s efforts and will reflect the progress of Nord Stream 2 and Turkish Stream. Depending on how much gas Russia will be able to send alternative routes, she will want to reduce the guaranteed transfer via Ukraine. – It is difficult to say whether the new system will comply with European regulations, for example on network codes (this would mean losing Gazprom’s influence on transmission via Ukraine – ed.) – concludes Vicari for BiznesAlert.pl.