Gazprom excludes Kiev from transit – Moscow refuses to use Ukrainian underground gas storages

Gazprom has pointedly refused the services of Ukrainian underground gas storages for use in gas transit and has severed the relevant contract. Naftogaz Ukrainy considers it a threat to the stable supply of gas to Europe and fears that Gazprom will accuse Kiev in the case of any disruption. The monopoly believes that the Naftogaz’s contribution to the stability of the supplies is insignificant, and Gazprom can compensate for the fluctuations in demand using European underground gas storages. Moscow wants to emphasize that its transit obligations don’t depend on the filling of the Ukrainian storage facilities and that’s Kiev that needs it.

On June 17th, the day after the transfer of the Ukraine to prepayment mode, Gazprom export decided to severe the contract on the balance transit, concluded with the operator of the Ukrainian gas transportation system Ukrtransgaz in 2010, the Ukrainian company reported. The contract allows Gazprom use Ukrainian gas for the supply to European consumers in case of sharp increase in the daily gas consumption in Europe, and then to pay to Naftogaz for this service. This scheme is justified by consumption peaks "to the day", which sometimes can’t be done only using the transit: the transportation of Russian gas through the Ukraine to Europe takes 36 hours. According to the Ukrtranshaz’s report, the contract will expire on June 23rd.

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