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GAS 26 April, 2018 10:00 am   
Editorial staff

Vitrenko: Gazprom is the last barrier for changes in Ukraine

The chief commercial director of the Ukrainian Naftogaz Yuri Vitrenko describes the process of making his country independent from gas supplies from Russia, in which Poles also take part.

BiznesAlert.pl: What is the progress on the way of Ukraine to independence from Russian gas?

Yuri Vitrenko: The pillar of changes is increasing domestic production and decreasing consumption. We believe that even with current trends, we will not need to import gas in three years. This will increase our safety. We also believe that integration with the European market and removing barriers between Ukraine and neighboring countries like Poland will increase security. It will make trading gas across the border and operate on a larger market possible, and will reduce the risk.

How does Nord Stream 2 and Gazprom’s resistance against the ruling of the arbitration court in favor of Naftogaz affect Ukraine’s energy security?

Gazprom does not comply with any rules. They do not want to submit to Ukrainian, international and EU law. For example, in Slovakia they have an agreement from the past that violates the principles of the third energy package. They do not want to change it. It is the dominant player in Central and Eastern Europe, which should not abuse market position. Gazprom is stronger in this region than in others, which can be seen in higher gas prices.

What are the prospects for cooperation with the West in the modernization of the gas transmission system in Ukraine?

Only thanks to the help of the West we managed to abandon shipments from Gazprom. Neighboring countries like Poland, Slovakia and Hungary were helpful. Without them, we would not have an alternative and would have to buy gas in Russia. New connections are created: small ones in Slovakia in Budincach, we have already increased the possibilities of the existing connection with Poland. We are also considering the Poland-Ukraine gas pipeline, but this project will depend on the market test. There must be a demand for its capacity.

What is the reform of the gas sector in Ukraine?

On the one hand, reforms are progressing, because Naftogaz is already fully prepared for the ownership separation. On the other hand, we must sign contracts that designate the gas pipeline operator. This, however, depends on the changes in the transmission contract with the Russian Gazprom. Nevertheless, the Russian company does not comply with the ruling of the arbitral tribunal regarding this agreement and does not allow it to move forward.

How?

We counted on the verdict to revise the contract, but the court decided that the Ukrainian regulator was responsible for implementing this idea. Perhaps, with the help of the European Commission, it will be possible to apply solutions to European law. For the time being, Gazprom still has privileged access to the transmission system. In fact, they block interconnections with neighbors. Gazprom is the last barrier for gas reform in Ukraine.

Interview conducted by Wojciech Jakóbik