Yuriy Vitrenko: Preserving gas transit via Ukraine can deter aggression

NJSC Naftogaz of Ukraine insists on long-term capacity bookings of the Ukrainian gas transmission system by European companies this autumn.

At the same time, Naftogaz is ready to prolong the current agreement with Gazprom after its expiry in 2024, Naftogaz of Ukraine CEO Yuriy Vitrenko stated during a press briefing on 22 August following the visit of German Chancellor Angela Merkel to Ukraine.

“The primary danger Nord Stream 2 poses is the threat to stop gas transit via Ukraine, which would mean a much higher risk of full-scale military invasion of Ukraine by the Russian Federation. We therefore view the transit issue and the preservation of physical transit volumes through Ukraine as directly tied to the security issue," said the Naftogaz CEO.

Vitrenko offered assurances that the Ukrainian gas transmission system provides reliable and competitive transportation compared to other gas pipelines, including the Nord Stream 2 gas pipeline.

"On the one hand, we insist that right now, this autumn, European transit companies must book long term Ukrainian transit capacities. In addition to contracts with European companies, we are ready to extend the current contract with Gazprom. This is not about stopping gas transit right now. We are talking about the fact that Gazprom can also book capacity for transit through Ukraine after 2024," he said.

"European companies under current contracts must be able to change gas transmission points and book capacity independently to receive gas at the Ukraine-Russia border. Gazprom, if it wants to supply any additional volumes to Europe, can do so through the Ukrainian GTS. There are no obstacles preventing this," Vitrenko added.

The Naftogaz CEO also emphasized Ukraine’s openness to supporting the involvement of international partners in the gas transmission system operator. "In other words, we are ready to explore a consortium with European companies or American companies which would take on the role of operator. This is an idea that is attractive enough for Ukraine as well as potential European and American partners. But the prerequisite for such a consortium is the booking of Ukraine's GTS capacities by European companies," Vitrenko said.

In addition, Vitrenko noted that the Ukrainian side also considers transit as a key source of funding for the transformation of the Ukrainian energy sector. "Ukraine receives quite a lot of revenue from gas transit. We have a contract until 2024 that provides Ukraine with guaranteed income of $7.2 billion. If transit is prolonged, for example, for another 10 years after 2024, this can guarantee Ukraine an additional $20 billion. This is a significant source of financing for Ukraine’s "green transition."

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