Experts Evaluate Kiev's Idea of Gas Purchase from Russia

In Ukraine, the terms for the resumption of gas purchase from Russia have been called. “If Gazprom agrees to move the point of transit of blue fuel from the western to the eastern border of Ukraine, then the Kiev authorities can again start buying gas directly from the Russian supplier,” said Ukrainian Deputy Prime Minister Vladimir Kistion.

Ukraine stopped buying gas in Russia in November 2015. But how realistic is it that in the coming years Ukraine will again start buying Russian gas from Russia?

President of the Institute of Energy and Finance, Vladimir Feigin, finds the conditions imposed by Kiev difficult. “The transfer of the transit point to the Ukrainian-Russian de facto border will mean that Gazprom will have to sell gas to European customers before it reaches Ukraine,” he said. “Such a scheme would be extremely beneficial for Ukraine, but it is unlikely that it will suit anyone in Russia and the EU”.

This means one simple thing: the authorities in Kiev want European companies to buy gas on the border of Ukraine and Russia. After that, Europeans will be forced to negotiate the transit of blue fuel not with the Russian, but with the Ukrainian side. In other words, Ukraine wants to be on the European side of gas transit rather than between the EU and Russia. This is a long-standing dream in Kiev, but it is still not clear how Gazprom will react. Nevertheless, in transferring the point of transit from the western to the eastern border of Ukraine, it will have to reconcile with all its European customers about prices, etc. European companies, the gas buyers, are unlikely to be unequivocally positive about this idea: they are used to buying gas on the western border of Ukraine and know what it costs them. Kiev wants the Europeans to agree on the cost of transit with it, and this can significantly affect the calculation of gas prices".

The president of the Ukrainian Analytical Center Alexander Okhrimenko, assesses the situation somewhat differently. In his opinion, most important in this story are not the conditions voiced by Kistion, but the signal that he sends. Publicly, Ukrainian politicians say that it is cheaper to buy gas not from Gazprom, but from Europe.

"This once again shows that politicians like to say stupid things while, in practice, everything always looks different,” Okhrimenko said. “Just in the past eight months, imports from Russia to Ukraine grew by 38%. Not fell, but grew! If you look at the structure of this import, it turns out that Ukraine first of all buys its mineral resources: coal, fuel oil, diesel fuel, from Russia. Ukraine both traded with Russia, and trades, despite all the assurances of the Kiev politicians. Sooner or later, it will return to the purchase of Russian gas. Of course, there is still a strong lobby in the Ukrainian leadership in favor of buying gas in Europe. But, I think that this comedy is already getting boring for everyone and will soon be over,"Okhrimenko added.

Dimitri dolaberidze