Weather Is Going to Affect Stability of Transit Deliveries of Russian Natural Gas to the EU

11 january 2017 | IA REGNUM

The stability of natural gas deliveries to the Ukrainian market as well as the transit of Russian natural gas to the EU in the near future is going to depend a lot on weather conditions. That was the opinion voiced by the Deputy Head of the Department for the Fuel and Energy Sector of the Analytical Center Alexander Amiragyan in an interview with a REGNUM news agency correspondent.

Alexander Amiragyan
Alexander Amiragyan
Department for Fuel and Energy Sector

"As of early January 2017 the situation with natural gas supplies in the underground storage tanks in Ukraine was satisfactory, however, the stability of natural gas deliveries to Ukraine and the transit of Russian natural gas to Europe is going to depend most and foremost on the weather conditions in the next few months. In the event of a cold winter Ukraine may experience a shortage of thermal and electric power, which they can shore up by consuming more coal, importing electricity or, in the worst case scenario, restricting their consumption," the analyst said.

Mr. Amiragyan noted that as of January 8 of this year, Ukraine had some 10.8 billion cubic meters of natural gas in its underground storage facilities, which is 15% (roughly 2 billion cubic meters) less than they had in early 2016. The expert's opinion is that there is nothing unusual about the increase in the daily deliveries to 80-90 million cubic meters, seeing how in past years daily deliveries sometimes exceeded 100 million cubic meters of natural gas per day. However, this year, Ukraine still faces the risk of a natural gas shortage, the specialist says.

In 2016, when the winter was relatively mild, the supplies of natural gas in Ukraine's underground storage facilities fell from 14.3 billion cubic meters in early January to 8.8 billion cubic meters in late March, meaning that 5.5 billion cubic meters was taken from the underground storage tanks. "If this year the amount of natural gas tapped from the underground storage facilities remains at roughly the same level as last year, the total supplies of natural gas in underground storage will fall to about 6 billion cubic meters, a threshold amount for the normal operation of the country's natural gas transport system," Mr. Amiragyan believes.

"And if we take into account the fact that this year the winter may prove harsher, natural gas consumption can end up being greater than last year, meaning that additional sources of energy will have to be sought out to generate heat and electric power," the expert stressed.

Mr. Amiragyan explained that the bulk of the natural gas in Ukraine is used to general heat and electric power as well as in industry. If they don't have enough natural gas, they will have to seek out alternative sources of energy to meet those needs, as well as optimize consumption. Heat and electricity production can be increased in the country by boosting generation at coal-fired thermal power plants and by importing electricity, including from Russia. "In the worst case scenario, rationing of heat and electricity cannot be ruled out," the expert explained.