RUSSIAN GAS FOR EUROPE ANEW
PLATTS - German Chancellor Angela Merkel does not want to see Russia's planned 55 Bcm/year Nord Stream 2 natural gas link to Germany taking away all of Ukraine's Russian gas transit revenues, she told reporters in Berlin Tuesday.
"It cannot be the case that Nord Steam 2 means that Ukraine no longer has any significance in transiting [Russian] gas," Merkel said after a meeting with Ukrainian president Petro Poroshenko.
She said she had made the same point to Russian President Vladimir Putin.
"In our view, a Nord Stream 2 project is not possible without our understanding of how the Ukrainian transit role will continue," Merkel said.
"This isn't only about an economic project. There are political factors to be considered," such as Ukraine's strategic need for transit revenues, she said.
Merkel's comments may put pressure on Russia to start talks with Ukraine on new transit terms for post-2019. Russia's current disputed transit contract with Ukraine expires at the end of 2019, which is also when Nord Stream 2 is planned to come online.
Russia is ready "to consider the possibility of using Ukraine's gas pipeline system from January 1, 2020, based on economically justified and competitive conditions for its usage," its energy minister Alexander Novak said Tuesday.
Russia sent around 94 Bcm to the EU via Ukraine in 2017, a six-year high driven by strong European demand for Russian gas.
But these volumes are likely to drop significantly once Nord Stream 2 comes online.
Gazprom CEO Alexei Miller said Tuesday that around 10-15 Bcm/year could still go through Ukraine, if Ukraine can "justify the economic viability of a new transit contract." Ukraine's gas company Naftogaz wants to start talks with Gazprom on post-2019 transit terms, and these may start this month, according to a Naftogaz source.
The talks are complicated by a Stockholm arbitration court ruling in February that appears to have inflamed rather than resolved a long-running dispute over the current transit contract.
Gazprom has rejected the court's order that it pay Naftogaz $2.6 billion to settle the dispute, and has said it wants to terminate or change the contract instead. Naftogaz has refused to accept this and is insisting Gazprom complies with the ruling.
The European Commission has offered to act as a mediator between Russia and Ukraine to safeguard Russian gas deliveries to the EU.
Novak reassured EC vice president for energy union Maros Sefcovic by telephone Tuesday that Russia is "committed to ensure stable supplies of natural gas, including via Ukraine," according to a note on the Russian energy ministry's website.
Novak and Sefcovic plan to meet to discuss the impact of the Stockholm court ruling, with the date still to be set, the ministry said.
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