Old Equipment, Multiple Routes Make Ukraine Gas Transit Difficult To Guarantee

KIEV, Ukraine -- There was good news when Russia's gas giant Gazprom announced on January 13 that it was pumping the first gas in a week into pipelines leading through Ukraine into Europe.
The bad news came a few hours later when reports emerged that the gas never made it out of Ukraine.Russia accused Ukraine of blocking the shipments. But Bohdan Sokolovsky, the energy adviser to Ukrainian President Viktor Yushchenko, said Russia deliberately shipped the gas along a technically complex route that would require Ukraine to cut off its domestic consumers in order to deliver gas to Turkey and the Balkans.Yushchenko himself later offered a slightly different explanation, saying Ukraine's multiprong pipeline system makes it impossible to direct gas flows fully in any one specific direction. The Ukrainian leader denied his country had any role in halting gas flows.Soviet-Era PipelinesCharles Esser, the energy analyst at the Brussels-based International Crisis Group, says many sections of Ukraine's pipeline system date back to the Soviet era and make it difficult to control gas flows."There is to a certain extent an integration of the pipeline system in Ukraine," Esser says. "I don't know what ability Ukraine has to actually close certain pipelines, so that the gas flows only in certain directions."Theoretically, it shouldn't be a problem if they have the proper capabilities, but in some places -- because there are Soviet-era pipelines [built at a time] when there was not such a concern about sending it to just this particular customer or that particular customer when it was designed -- there may be a limited ability to do that," Esser says.The dispute has also focused on the issue of "technical" gas."The Russians have accused the Ukrainians of taking what is called the 'technical' gas out of the pipelines as well, which is the amount of gas needed to sort of get things flowing," Esser explains.A certain volume of of gas needs to be added to volume daily in order to keep gas moving through Ukraine's pipeline.It is unclear who is responsible for providing, or paying for, the technical gas. A European Commission official last week suggested that current transit contracts stipulate that the onus is on Ukraine to provide the extra gas.Ukraine, however, has refused, saying it is Russia's responsibility.Who Pays?Esser says he expects Russia will ultimately opt to supply the technical gas in order to restore the flow to consumers in Europe, but will likely put the cost back on Ukraine in future negotiations. Without the technical gas, Esser says, the pipelines cannot function."There has to be a certain amount of gas, which I think is about 18 million cubic meters, that has to be put in of this so-called technical gas in order to get sufficient pressure in the system for the gas to flow," Esser says. "And as far as I know, that is not there."Another issue is the initial amount Russia made available to the pipeline system early on January 13. Esser said the volumes Gazprom shipped into the Ukrainian pipeline system were roughly 25 percent of the amount needed to fill the pipelines."The amount of gas flowing through is smaller than normal," he says. "I've seen figures of only 76 million cubic meters per day, as opposed to the usual 300 million. Flows will probably be somewhat weak and slow."Russian officials had argued that they would begin with reduced flows until they had received assurances that Ukraine was not tampering with the supplies. But European officials said conditions had been set for the full resumption of gas shipments.Assuming Russian, Ukrainian, and European Union negotiators can resolve these latest complications, there are still other concerns that need to be addressed."These pipelines are from the Soviet period -- the 1970s, particularly -- so they're over 30 years old," Esser says. "They are in better condition than some of the pipelines in [former] Soviet Central Asia, but still not in perfect condition. Hence, there are some leaks that waste gas."Esser noted that while Gazprom says it is prepared to resume full supplies to Europe, the process of filling the pipelines, bringing the pressure up, and then getting it to all Gazprom's customers could take a while -- three days before small volumes begin reaching all the areas supplied by Russian gas, and even longer before the situation returns to what it was at the end of last year.

Russia to cut Ukraine gas supply

Russian President Vladimir Putin has told gas giant Gazprom to cut supplies sent via Ukraine to Europe over allegations Kiev is siphoning some off.
Mr Putin said flow should be reduced by the amount Ukraine had taken since deliveries ended on 1 January.
Russia stopped supplying gas to Ukraine five days ago amid a row over unpaid bills and a new pricing contract.
Ukraine denies siphoning off gas and says technical problems are disrupting the flow.
Pipes across Ukraine carry about one-fifth of the European Union's gas needs.
Several EU countries have reported a drop in gas deliveries since 1 January, apparently as a result of the dispute.
'Daily reductions'
The move came after Mr Putin held talks with Gazprom CEO Alexei Miller.
Mr Miller recommended that deliveries via Ukraine should be reduced "by the amount stolen by Ukraine, that is 65.3 million cu/m of gas".

Future deliveries should be reduced on a daily basis by the amount of gas stolen, he added.
Gazprom said it would compensate by sending more gas to Europe via other routes.
Earlier, EU Commission spokesman Ferran Tarradellas said there was no immediate danger to EU consumers or industry.
The cut-off had produced "some irregularities" but "no substantial disruption of supply to any member state", he said.
Among the countries to have reported falling pressure in their pipelines are Poland, Hungary, Bulgaria, Romania, the Czech Republic and Greece.
In some cases supplies dropped by as much as 30% - but countries are compensating by using their own reserves or increasing deliveries from other sources.
The row between Russia and Ukraine has been simmering for weeks. Gazprom says Ukraine owes it money; Ukraine says it has paid its debt. The two sides have also failed to agree on the price Ukraine should pay for gas in 2009.
A similar row between Gazprom and Ukraine at the beginning of 2006 led to gas shortages in several EU countries.
EU leaders have been meeting in Brussels to discuss the dispute and a delegation has also been sent for talks with both Ukrainian and Gazprom officials.
But, say correspondents, the EU is reluctant to get involved in what it describes as a commercial dispute - reflecting Europe's own deep divisions on how to respond to Russia.