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Hoping for a temperate winter

July 10, 2014

Nothing much has been written about the gas dispute with Russia in blog entries here since the latest disagreement between Kyiv and Moscow that seems set for the Stockholm Court of Arbitration.  To be blunt there is little to say regarding the legal positions and due process embarked upon.

Of note, perhaps, was the RADA decision on 4th July to allow a 49% stake to US and Europeans in the Ukrainian Gas Transport System, though it remains to be seen whether that investment opportunity is taken up.  If so it may force a certain degree of transparency that currently is missing in the energy sector of Ukraine.  There was no opportunity for Russia to invest.  In the current climate, unsurprising.

Anyway, both Moscow and Kyiv, also seem to be making somewhat fanciful claims regarding “reverse flow” from the EU Member States in both quantity, technical ability and the legalities of such.

“How can it be possible to supply the gas on the same pipe to one side and another? We know that there is no reverse gas flow. There is no need to be a specialist to understand it.”  President Putin 1st July 2014.

Entirely true if trying to paint “reverse flow” as using the same pipeline at the same time to push gas in two different directions – but most people are not as feeble-minded as those President Putin would appear to preach to.

Unless he has forgotten, is entirely unaware, or is choosing to ignore pipelines such as the Vojany pipeline, reverse flow is a reality.  Because Vojany has not been used for 15 years, does not mean it does not exist.  And it is through this pipeline from Slovakia, and similar small pipelines from other post Warsaw Pact nations that the Europeans intend to send gas to Ukraine, despite it irking The Kremlin.  “Reverse flow” in so much as it is pumped east to west on one pipeline system, and then some of it pumped back east on another.

Very good – except that combined capacity via ex-Warsaw Pact pipelines will only account for 16 – 17 billion cubic meters per annum.  Ukrainian usage is about 50 – 60 billion cubic meters per annum.  Ukraine’s own domestic production need be added into the mix and whatever gas sits in underground storage too – at least that gas that is not required for technical reasons to keep gas flowing to Europe.

Evidently, according the the Ukrainian Energy Minister on television the other night, there will be a shortfall of about 6 billion cubic meters – which he claims can be reduced to about 2 billion cubic meters by intelligent usage, conservation, as well as alternative energy sources.

Perhaps German companies like Bosch will see a dramatic sales increase of their electric boilers in Ukraine as winter approaches?  An uplift in wood burning ovens?  A rush on electric fires?

In essence however, through Ukrainian business and society being more wise with their gas usage, a saving of about 4 billion cubic meters can be accomplished according to the Energy Minister, and perhaps he is right – Ukraine has had practice in both 2006 and 2009.  Somebody will have kept notes and statistics.

The remaining 2 – 4 billion cubic meters?  Well, on the presumption no agreements are reached prior to any Stockholm hearings – or any results after they take place whenever it may be – Ukraine need hope for a very temperate winter for the elderly and the very young – or prioritise them some how.

The rest of the nation?  It practiced in 2006 and in 2009.  There is no reason to believe it won’t manage once more in 2014 – particularly if the government makes a convincing case that any such sufferance is of equal importance to national sovereignty as that of the current events in eastern Ukraine.

 

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