January 18, 2009 / 12:43 AM / 11 years ago

FACTBOX: Gas needed to keep European supplies flowing

MOSCOW (Reuters) - Both sides in the Russia-Ukraine dispute over gas supplies to Europe say that, to settle the dispute, a solution is needed to the question of “technical gas.”

This is the gas required to fill up the empty pipeline system and to maintain pressure when supplies are pumped from Russia through transit country Ukraine to customers in Europe.

Following are some facts about “technical gas”:

— Because the pipeline system through Ukraine has emptied since Russia turned off the taps on January 7, a large quantity of gas needs to be pumped into the system to restore pressure before supplies can flow.

— In addition, every day some small amount of gas is needed to keep up pressure in the system and replace fuel lost to leakages.

— Adding both categories together, Ukrainian state energy company Naftogaz has said it needs around 21 million cubic meters of gas per day to ensure European gas transit, or 360 million cubic meters of gas in January, 600 million cubic meters in February and the same amount again in March.

— Under the existing contracts between Russia and Ukraine, Ukraine is responsible for the cost of the “technical gas,” which is covered as part of the transit fee Russia pays to Ukraine.

— Kiev, however, has argued the size of the transit fee depends on the price Moscow charges it for the gas it buys from Russia for domestic consumption. Until that price is agreed, it is impossible to agree a transit fee and hence to provide “technical gas.”

— To unblock the dispute and get gas flowing to Europe, Russia has proposed that a consortium of European gas companies pay for the “technical gas” until Kiev and Moscow have agreed 2009 prices for Ukraine. The gas companies, led by Italy’s ENI, would be reimbursed by Kiev once the dispute is settled.

— Gazprom, Russia’s gas export monopoly, will charge the consortium the prevailing market price of around $450 per 1,000 cubic meters for the technical gas, Deputy Chief Executive Alexander Medvedev said on Friday.

— At this price, the amount of gas Ukraine would need to keep the system working would cost $162 million for January and $270 million in each of February and March.

Reporting by Tanya Mosolova, writing by Michael Stott

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below