Ukraine hopes for European Commission’s firmness in adhering to key principles of Energy Community

The Ukrainian side is hopeful that the decision of the European Commission regarding the usage of capacity of the OPAL pipeline in Germany will be fully in line with the EU energy regulations ...

The Ukrainian side is hopeful that the decision of the European Commission regarding the usage of capacity of the OPAL pipeline in Germany will be fully in line with the EU energy regulations, including Article 36 of Directive 2009/73/EC concerning common rules for the internal market in natural gas, as well as the EU acquis on competition, which, inter alia, prohibits the behavior directed at the abuse of market dominance. Being a Contracting Party of the Energy Community, Ukraine expects that the European Commision’s decisions are fully coherent with the rules and principles of the Energy Community and are directed at achieving the organization’s fundamental goal to unite an energy independent Europe.

This opinion was expressed by Andriy Kobolyev, CEO of Naftogaz of Ukraine in response to the media reports earlier this week stating that the European Commission is contemplating an extension of Gazprom’s ability to use OPAL capacities. The pipeline owned by Gazprom, Wintershall and E.On connects the Russian Nord Stream pipeline with gas transmission systems of Central and Western Europe.

The increase of capacity available to Gazprom in OPAL is likely to lead to an aggravation of the dependence of a number of EU countries from the Russian monopoly supplier. It will also support Russia’s plans to destroy Ukraine’s gas transmission system as a competitor in the delivery of gas to the EU consumers.

If additional 30% of OPAL capacity is made available to Gazprom, the transit volumes are expected to shrink by 10-11 bcm/y resulting in lost revenues for Naftogaz of USD 290-320 million (based on the old tariffs). Should Gazprom get access to additional 40% of OPAL capacity, the transit volumes will drop by 13,5-14,5 bcm/y with Naftogaz’ transit revenues decreasing by USD 395-425 million annually.

The decision of the German energy regulator, approved by the European Commission, currently in place stipulates that Gazprom may use only 50% of the technical capacity of OPAL amounting to 36 bcm/y. The remaining capacity is not to be used by the Russian party but rather is offered for other users.

Joining the Energy Community as a Contracting Party, Ukraine has accounted for the firmness of the grounding principles of this organization to all of its participants. The task of the Energy Community, inter alia, is “to enhance the security of supply of the single regulatory space” while its activities shall include “the creation … of a market in Network Energy without internal frontiers, including the coordination of mutual assistance in case of serious disturbance to the energy networks or external disruptions”.

Ukraine is the first Energy Community Contracting Party to fully implement the Energy Community acquis on security of natural gas supply.

The Ukrainian side is hopeful that the European Commission’s decision will fully comply with the grounding principles of the Energy Community and will contribute to limiting the EU’s dependence on a single gas supplier.





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