New routes for transporting energy are needed because of the war started by Russia and Ukraine can play an important role in ensuring the security of supply for the European Union due to its big natural gas storage facilities. At the same time, these facilities could contribute to the affordability of gas prices, said Kateryna Kovalenko, Director Strategy Department at LLC Gas TSO Ukraine, at the Central-European Natural Gas Congress, organized by Transgaz recently in Sibiu, Romania.
„Due to the war with Russia and the decarbonization process in the EU, new gas transport routes are needed and Ukraine can play a big role. Right now the key pricing factor is the access to diversified gas supply”, she said.
The country has interconnections with four EU member states and the Republic of Moldova. The gas storage capacity of Ukraine is about 10-15 billion cubic meters (bcm). For comparison, Romania’s gas storage capacity is around 3 bcm. According to Kovalenko, this year, EU countries and the Republic of Moldova transported to Ukraine 2 bcm to be stored for the winter, and the injection of additional volumes will continue in October and November.
At this moment, the key pricing factor is access to diversified gas supply sources, and currently EU’s main gas suppliers are Norway, Algeria, Azerbaijan, and others, plus the LNG imports mainly from the US and Qatar. Nevertheless, the countries situated further from the gas suppliers are the most vulnerable to price fluctuations and supply distortions.
„In this respect, South Europe and the Balkans have more diversified energy sources and there will be LNG terminals in Croatia and Greece that will expand their capacities. Also, this region can have access to Caspian gas and there is local production in Romania and Bulgaria”, she added.
On the other hand, the gas market in Southeastern Europe has a surplus of 16 bcm while the export capacity of the countries in the region is only 6 bcm. At the same time, Austria, Slovakia, Ukraine, and the Republic of Moldova are looking for new gas sources. This is the reason Ukraine needs to connect its gas infrastructure to the EU, especially since Ukraine’s gas transit contract with Russia expires in December 2024.
„That is why we need to connect these two regions, one with a gas surplus and the other that needs gas, especially when the transport of Russian gas through Ukraine will stop in December 2024. We propose to develop a trans-Balkan pipeline to connect Ukraine, the Republic of Moldova, Romania, and Bulgaria with Greece and Turkey. These pipelines are underused and have a capacity of 80 million cubic meters a day from the north to the south. Enabling a reverse flow could be beneficial for the region especially since we have storage capacities. The reverse flow will be very cost-effective and a very fast solution”, Kovalenko added.