Gazprom to cut gas transit via Ukraine by 80 percent

Alexey Miller, CEO of Russian gas supplier Gazprom.

Alexey Miller, CEO of Russian gas supplier Gazprom.

The company plans to send deliveries to Europe via Nord Stream 2 pipeline

Gazprom is looking into the possibility of retaining Russian gas transit to EU countries across Ukrainian territory beyond 2019, when the existing gas transit contract is due to expire, according to Gazprom Chief Executive Alexei Miller. But transit volumes will be sharply reduced. Miller made the following comments in an interview with Reuters.

"As for transit through Ukraine after January 2020, we have already said that we are ready for talks... However, we can only talk about much smaller volumes, possibly around 15 billion cubic meters (cu.m.) of gas a year for countries which border Ukraine.”

In 2016 transit of Russian gas to Europe through Ukrainian territory stood at 82.2 billion cu.m., compared with 67.1 billion cu.m. in 2015. In the first quarter of 2017 the volume of gas transit through Ukraine increased by another 20 percent on an annualized basis, with 23.2 billion cu.m. of Russian gas having been pumped through Ukrainian pipelines over the first three months of the year.

Gazprom, however, does not believe it will be sensible to maintain such levels after the completion of the Nord Stream 2 gas pipeline, which will allow gas to be pumped directly to Germany.

"This route is 2,000 km shorter than the route via Ukraine," Miller explained.

He also noted that for decades Ukraine has failed to invest in the modernization of its pipelines and the new route will consequently be "ecologically safer."

Construction of Nord Stream 2 is due to begin in 2018, with commissioning scheduled for the end of 2019.

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