Ukraine attacked Gazprom through Europe

Valery Mikhailov

The operator of the gas transportation system of Ukraine (OGTSU) appealed to the EU authorities because of the actions of Gazprom . According to OGTSU, the Russian corporation is emptying its underground storage facilities in Europe so as not to increase transit through Ukraine. In Kiev, they believe that the EU antimonopoly body should intervene in the situation.
The company notes that due to the stoppage of the Yamal-Europe and Nord Stream- 1 routes , in July the EU countries did not receive nearly two billion cubic meters of gas.
“In order to compensate the Europeans for the lost volumes of gas and at the same time not to increase additional transit through Ukraine, Gazprom is emptying its UGS facilities in Europe. According to the GIE, low reserves in Europe are precisely in the underground gas storage facilities (UGS) controlled by Gazprom. Germany’s UGS operator Astora (owned by Gazprom) has less than 13% occupancy, other operators have an average of 63%, Austria Astora and GSA (also Gazprom) have 14%, other operators have 48%. Gazprom is taking gas from storage facilities to fulfill its contracts. Accordingly, the shortage of gas in UGS facilities in Europe is largely artificial and is not the primary reason for the rise in prices, “- said the general director of OGTSU Sergey Makogon .
It is clear that in this case Ukraine performs approximately the same role as a low-ranking dog in a pack: after all, according to the logic, claims about insufficient gas supplies, if there really are any, should be put forward by Europeans who have not received gas. But the question is, to what extent are these claims substantiated in principle?
Let’s start with the fact that in the first seven months of this year, Gazprom has increased gas supplies to non-CIS countries by 23% compared to last year. True, the calculations took into account, among other things, the many times increased supplies to Turkey . But deliveries to the EU also increased by about 20%. So Gazprom cannot be blamed for the reduction in supplies. But other major gas suppliers to the EU have cut supplies. This is Norway , which is carrying out preventive maintenance and repair work on its mining infrastructure. And Algeria , which regularly supplies pipeline gas to Europe, but redirected liquefied gas to Asia , where it is bought at a significantly higher price. And especially Qatar, which reoriented itself to Asia even more. And American liquefied gas goes there too. In addition, intra-European production is also declining due to the gradual closure of the largest European gas field, Groningen.
According to the logic of what is happening, it is these suppliers who need to make claims for the rise in gas prices on the European market due to its shortage.
Claims regarding the “failure to increase” supplies through the Ukrainian GTS are also untenable. Gazprom and Naftogaz“there is a contract for the transit of 40 billion cubic meters of gas this year according to, one might say, the“ pump or pay ”formula, which is onerous for Gazprom. However, it transports gas in the agreed volumes and even more! In the first half of the year, Gazprom supplied 21.7 billion cubic meters of gas in transit through Ukraine, with the agreed 20 billion cubic meters. Yes, this is less than in the first half of last year (24, 9 billion cubic meters), but then, according to the contract, he had to pump or pay for the transit of 65 billion cubic meters per year.
On average, in the first half of the year, transit through Ukraine amounted to 3.62 billion cubic meters. In July, about which the Ukrainian side makes special claims, the volume of pumping turned out to be even higher : 3.85 billion cubic meters. In order to carry out supplies in excess of the minimum volume stipulated in the contract, Gazprom is forced to purchase additional capacities. Moreover, at a higher price: services for booking additional capacities of the Ukrainian GTS for a month cost 20% higher than the base contract cost.
Nevertheless, the corporation regularly reserves solid additional capacity of 15 million cubic meters per day. Yes, in addition, OGTSU monthly puts up for auction intermittent additional capacity of 64 million cubic meters per day. The difference is that when booking intermittent capacities, OGTSU carries out transit depending on its capabilities: without a firm guarantee of immediate pumping. Of course, in European practice, such capacities are put up for auction at a discount. However, Kiev stubbornly exposes them at the same price as the solid ones, and Gazprom is no less stubbornly at the auctions. After that, OGTSU every time issues statements about the intrigues of the Russian partner.
Another complaint by OGTSU concerns the low occupancy of Gazprom’s UGS facilities in Europe. Although what relation the Ukrainian operator has to them is completely incomprehensible. In Ukraine, the maximum occupancy of UGS facilities almost doubles from year to year. However, in this regard, neither Russian gas workers nor European consumers are satisfied with hysterics. Gazprom uses its own European gas storage capacities in a way that suits it and in a way that would allow it to fulfill its contractual obligations to supply gas to consumers – and this topic should not concern anyone at all.
But even if we look at it, there is an answer to the question of why Gazprom’s European storage facilities are so poorly filled. In the autumn-winter season 2020/2021, a record 60.6 billion cubic meters of gas were raised from Russian UGS facilities. Moreover, the corporation entered the winter with reserves of 72.3 billion cubic meters. According to Gazprom’s plans, it should enter the new heating season with reserves of 72.6 billion cubic meters. It is absolutely natural that the filling of Russian storage facilities is a priority for him and is carried out as a matter of priority. So the European UGS facilities will just have to wait. As for the rise of gas from them in the summer, then this can happen: no one, for example, is immune from accidents .
In short, OGTSU’s claims against Gazprom look ridiculous and ridiculous.
But this is not a reason to relax. Naftogaz’s claims regarding Gazprom’s shortfalls in gas supplies under the 2009 transit contract also looked ridiculous and ridiculous from the outset – after all, the contract did not provide for a “download or pay” formula. However, the Stockholm Arbitration Court ultimately made a political decision that confirmed the validity of these ridiculous claims, and most importantly, partially pinned the content of Ukraine on Russia (Gazprom transferred $ 2.9 billion to Naftogaz at the end of 2019, which were transferred to Naftogaz in almost full volume to the state budget of Ukraine). It is probably not worthwhile to completely rule out an attempt to turn this trick again on the part of the EU antimonopoly authorities.