* EU reverse flows to Ukraine likely to be below 10 bcm/year
* Russia supplies over half of Ukraine's gas
* Europe also may have insufficient reserve gas for Ukraine
By Michael Kahn and Henning Gloystein
PRAGUE/LONDON, March 6 Directing natural gas
from the European Union to Ukraine if Russia stops supplying its
western neighbour would fail to keep up with demand for long as
capacity between the EU and Ukraine is too small, analysts said
Ukraine last year imported around 28 billion cubic metres
(bcm) of natural gas from Russia, which wants to maintain its
influence over the former Soviet republic and fend off EU
efforts to limit Moscow's sway.
Disputes between Russia and Ukraine, which consumes more
than 50 bcm of gas a year, have previously led to supply cuts
for the EU, including in 2009 when hundreds of thousands of
homes in southeast Europe went without heat in winter.
So far, Russia's state-controlled Gazprom, which
supplies around 30 percent of the EU's gas needs and sends a
third of that gas through Ukraine, has maintained supplies to
Ukraine during a crisis in which Russian forces have effectively
seized Ukraine's Crimea region.
But to prepare for a possible cut-off, the European Union
has plans to send gas from its own storage facilities to
"The country (Ukraine) has sufficient gas storage to hold it
through a few months, and could also turn to neighbours for
additional gas supplies via reverse flows on pipelines that
could bring up to 10 bcm (per year) of gas from Germany and
Hungary through Poland and Slovakia," political risk consultancy
Eurasia Group said in a report this week.
Many other analysts say the available capacity to pump gas
from the EU to Ukraine is well below 10 bcm, and Eurasia Group
also warned that Ukraine would be likely to receive less.
"If gas supplies to Europe are already compromised by an
ongoing conflict, Ukraine may find its neighbours increasingly
unwilling to provide this stopgap supply," it added.
NOT ENOUGH GAS?
One of the EU's key plans to support Kiev in case of a
supply cut by Russia is to use reverse flows to send gas to
Ukraine, but at the moment the capacity to do so is limited.
Ukraine began importing gas through reverse flows from
Poland and Hungary in 2012 but analysts said the amounts so far
have been equivalent to a mere 2 bcm a year.
According to consulting group Wood Mackenzie, Poland has a
reverse capacity of 1.5 bcm to Ukraine while Hungary is able to
send 3.5 bcm. Romania has the potential for 1.8 bcm but there
has been no firm agreement on its use, the consultancy said.
The biggest opportunity would be pumping gas through
Slovakia, the EU gateway for Ukrainian supplies, which has more
than 20 bcm of reverse capability.
The problem is that such flows from Europe to Ukraine, which
would largely send Russian imports into the EU back east,
require contractual agreements between the governments of
countries through which the gas passes.
While there have been talks, no deal has been finalised,
although sources at the European Commission said it was working
to get the reverse-flow arrangement finalised quickly.
Despite these efforts, one source said it would take another
six months for gas to flow from Slovakia to Ukraine, too late to
address any imminent disruptions, and the link could initially
carry only 6 bcm per year.
The real issue, however, might not be Ukraine but Europe
itself. Wood Mackenzie estimated Europe would need more than 160
bcm of Russian gas in 2014.
While Russia has enough gas and can reroute some flows from
Ukraine to the Yamal Europe and Nord Stream pipelines, which
supply Germany, the consultancy said these alternatives would
still leave Europe needing more than 30 bcm of gas via Ukraine.
"Moscow does not shy away from sanctions against Ukraine, it
has made this clear in the last few days," German consultancy
Ispex said. "The question is what will happen to the transit gas
destined for western Europe should Moscow stop deliveries to