Naftogaz is ready to cooperate with European companies even without a contract with Gazprom

Aleksey Gromov commented to the Ekonomika Segodnya newspaper on the prospects for gas transit through Ukraine after the completion of the Nord Stream 2 gas pipeline.

Ukraine felt itself a loser after the negotiations between the United States and Germany on Nord Stream 2, Alexei Gromov, Director on Energy of the Institute for Energy and Finance said in a conversation with the Economics Segodnya FBA.

Naftogaz is ready to negotiate with Gazprom

Yuriy Vitrenko, Head of Naftogaz, said that Kiev is ready to negotiate with Gazprom on the continuation of gas transit through the territory of Ukraine after 2024 and considers it inappropriate to have a dialogue on this issue with Germany.

According to Aleksey Gromov, the statement by the Head of Naftogaz was made against the background of decisions taken by the administration of President Joe Biden during negotiations with Germany. According to the agreements, Washington will not impose sanctions on the completion of Nord Stream 2, and Berlin undertakes to reload the Ukrainian GTS and ensure transit after 2024.

“These are the main conditions in which Kiev felt like a loser. Ukraine hoped that the United States would hand over Germany, introduce prohibitive sanctions and prevent not only completing the construction, but also commissioning this gas pipeline,” the expert explained.

The five-year contract between Naftogaz and Gazprom for the transit of gas through the territory of Ukraine ends in 2024. Until this time expires, the Russian energy company annually pumps 40 billion cubic meters of gas. For transit, Ukraine will receive a total of more than $ 7 billion.

Ukraine is very nervous about the situation with Russian gas, the transit of which is a good source of income for the country. President of Ukraine Volodymyr Zelensky has publicly stated more than once that he would fear the loss of transit of Russian gas after the launch of Nord Stream 2.

Prime Minister Denis Shmygal previously threatened that Kiev would file a claim with the Stockholm Arbitration if Moscow stops transit through the Ukrainian gas transportation system.

Negotiations with Germany will not help Naftogaz

Germany and the United States plan to begin consultations on the extension of the agreement on gas transit through Ukraine no later than September 1. However, Naftogaz is confident that it is necessary to start a discussion on cooperation with European companies even before negotiations with Gazprom.

“Vitrenko’s statements are connected with the fact that it is inexpedient for Ukraine to involve Germany in negotiations on Ukrainian transit. Ukraine has shown resentment that Germany openly supports Nord Stream 2, - Alexey Gromov comments. “Do not forget that as soon as the gas pipeline starts working even at 50% of its capacity, Germany will become the largest distributor of Russian gas in Europe, and for it the importance of Ukrainian transit will decrease even more.”

Kiev understands very well that Berlin will do for the needs of Ukraine exactly as much as is required for Nord Stream 2 to work. No more, the expert is sure.

In this regard, negotiations with Germany are not of particular interest for Ukraine. 

“Germany will still be an important party to this or that negotiation process. However, with its statement, Kiev hints that as many European countries and companies as possible that are really interested in Ukrainian transit will join the dialogue. We can talk about the countries of Central and Eastern Europe, which, from the point of view of Ukraine, can provide a greater representation,” Gromov says.

The purpose of Vitrenko's statement was precisely to expand the circle of participants in the negotiations, to include not only Russia and Germany, which will benefit from SP-2, but also other European countries for which this benefit is not obvious and which would like to keep Ukrainian transit, the expert summed up.