EU Facing with Potential Risks Due to Gas Deadlock
Posted: 07/31/2014 01:07:51 Edited: 07/31/2014 03:07:35 Clicks: 2567
Last month, due to Ukraine refused to pay the bills, Russia stopped supplying gas to domestic market in Ukraine while gas from Russia to EU crossing through Ukraine was maintained. Analysts consider that gas negotiation between Russia and Ukraine is still in deadlock though gas supply becomes more and more intense. If Russia and Ukraine can not reach an agreement in the near future, EU will face with potential risks of gas supply in winter.
Two gas disputes had ever occurred between Russia and Ukraine in 2006 and 2009. Russia stopped supplying gas to EU through Ukraine. For that, Europe lived though a cold winter for shorting of gas.
Gas from Russia accounts of one third of demands in EU, among half of gas supplied to EU crosses through Ukraine. Currently, Ukraine has low demands for gas and reserves of gas storage are only half of the whole reserves. Experts show that EU fears that gas supply will become a problem in winter.
Last year, the demands for gas in Ukraine were 45 billion cubic meters, relying on import from Russia heavily, particularly in winter. In 2009, gas imported from Russia through Ukraine by EU accounted for 80% of total import volume from Russia. Then, proportion of import gas through Ukraine descended. Because gas imported from Norway and Algeria could meet the demands for gas and requirements for high gas storage in EU.
The main obstacle of gas negotiation between Russia and Ukraine is price. Ukraine advocates 385 USD per thousand cubic meters for gas in winter and over 300 USD per thousand cubic meters in summer. Russia had ever provided huge privilege of gas to Ukraine during ruling of former President, Viktor Yanukovych. Now, price of gas is recovered to 485 dollars per thousand cubic meters.
Analysts consider that high reserves of gas and gradually descending demands in EU will not promote signature of contract. Gazprom supplies 26% of demands for gas of EU. Demands for gas of EU have been decreased from 510 billion cubic meters in 2010 to 410 billion cubic meters. In the next four years, demands for gas will not be higher than 450 billion cubic meters. Move over, reserves of gas storage in EU have realized 77%.
For ensuring steady gas supply to RU, reserves of gas storage in Ukraine must reach 18 billion cubic meters before winter. However, current gas reserves are only 14.7 billion cubic meters, accounting for 46% of gas storage capacity. Analysts consider that gas reserves cannot meet the requirements before winter and price of gas may be increased by 12% before winter.
Two gas disputes had ever occurred between Russia and Ukraine in 2006 and 2009. Russia stopped supplying gas to EU through Ukraine. For that, Europe lived though a cold winter for shorting of gas.
Gas from Russia accounts of one third of demands in EU, among half of gas supplied to EU crosses through Ukraine. Currently, Ukraine has low demands for gas and reserves of gas storage are only half of the whole reserves. Experts show that EU fears that gas supply will become a problem in winter.
Last year, the demands for gas in Ukraine were 45 billion cubic meters, relying on import from Russia heavily, particularly in winter. In 2009, gas imported from Russia through Ukraine by EU accounted for 80% of total import volume from Russia. Then, proportion of import gas through Ukraine descended. Because gas imported from Norway and Algeria could meet the demands for gas and requirements for high gas storage in EU.
The main obstacle of gas negotiation between Russia and Ukraine is price. Ukraine advocates 385 USD per thousand cubic meters for gas in winter and over 300 USD per thousand cubic meters in summer. Russia had ever provided huge privilege of gas to Ukraine during ruling of former President, Viktor Yanukovych. Now, price of gas is recovered to 485 dollars per thousand cubic meters.
Analysts consider that high reserves of gas and gradually descending demands in EU will not promote signature of contract. Gazprom supplies 26% of demands for gas of EU. Demands for gas of EU have been decreased from 510 billion cubic meters in 2010 to 410 billion cubic meters. In the next four years, demands for gas will not be higher than 450 billion cubic meters. Move over, reserves of gas storage in EU have realized 77%.
For ensuring steady gas supply to RU, reserves of gas storage in Ukraine must reach 18 billion cubic meters before winter. However, current gas reserves are only 14.7 billion cubic meters, accounting for 46% of gas storage capacity. Analysts consider that gas reserves cannot meet the requirements before winter and price of gas may be increased by 12% before winter.
