The technical cooperation agreement between the GTS of Ukraine Operator LLC and the Romanian Transgaz operator from January 1, 2020, has not only unblocked the Trans-Balkan corridor but also strengthened Ukraine’s position in negotiations with Gazprom.
If the parties failed to conclude on the preservation of the transit of Russian gas to Europe through Ukraine, Moldova would have risked remaining without gas. And Russia would use it against Ukraine, Sergey Makogon, LLC GTS Operator Director-General, assured.
“We were worried about this. We really didn’t want Moldova to blame us for not reaching the gas agreement with Gazprom. In order to forestall such a development of events, we started negotiations with Moldova in the spring.
In the low price season in the summer, when Ukraine was creating its reserves, they didn’t buy gas. Just recently, Moldova concluded a memorandum with the EBRD, which agreed to allocate $ 50 million to the country for the purchase of gas. Naturally, they simply did not have time to create a gas reserve by January 1. And if the supplies through the Trans-Balkan gas pipeline were not unblocked, in the absence of transit through Ukraine, the possibility of being left without gas in the middle of winter would be quite real for Moldova,” he said.
Free access of suppliers to the infrastructure of the Trans-Balkan gas pipeline opened for Moldova an additional technical opportunity to import gas for its own needs from Turkey, Greece, Bulgaria. Starting from January 1, at the interstate point Isakcha1 - Orlovka1, capacity on the route Ukraine - Romania in the amount of 17.8 million cubic meters per day becomes available, as well as 15.8 million cubic meters per day in the opposite direction.
“This allowed the Ukrainian side saying, dear Gazprom, we now have a serious option. If you cut off our transit, Moldova will not be left without gas” said Makogon.
He emphasized that in the current conditions when Gazprom dictates its terms, the opening of the Trans-Balkan direction is a victory not only for Ukraine, which has gained the opportunity to import gas from Europe from another direction, but also a significant victory for Moldova.
As already mentioned, opportunities are opening up for Ukraine to supply gas from LNG terminals in Greece, as well as Caspian gas, which will be transported via the TANAP gas pipeline from Azerbaijan. In addition, it is possible to supply gas from Romanian offshore.
According to him Makogon, in terms of technical nuances, a long coordination work was conducted. In particular, the parties could not come to a unified position on the issue of gas quality. Our requirement was a gas content of at least 90% methane. Our counterparts on the Romanian side insisted on 70% because in Romania the quality of the produced gas is low.
“We said that consumer equipment in Ukraine is not designed for gas of this quality. And then, the gas pipeline infrastructure will be used to supply not exclusively Romanian gas. At the final negotiations, we came to an agreement on the 90% methane content, which is reflected in the text of the inter-operator agreement,” said Makogon.
Within three years, as part of the project, infrastructure change projects were also implemented. In particular, the transition between Bulgaria and Greece was modernized, compressor stations in Bulgaria and Ukraine were reconstructed, thanks to which gas can now swing in two directions. The Moldovan operator also strapped around its compressor station so that it could work in the reverse direction.
It is worth noting that so far from January 1, 2020, only one of the threads of the Trans-Balkan gas pipeline will be involved. Another is still reserved by Gazprom until 2024. If after the expiration of the contract, which allows the Russian monopolist to retain the exclusive right to use this string, European standards will be applied in the same way and access will be open for all suppliers, the capacity of the Trans-Balkan gas pipeline in the reverse direction will increase from the current 6 to 20 billion cubic meters per year.