So, the agreement between Moscow and Ankara on “Turkish stream” has been achieved. We begin the construction of a pipeline to finish it in 2019. The media is already calling the deal of the gas impulse. But who breakthrough, and to whom, and defeat. Russia successfully coming to Europe from the flanks, and a huge gas pipeline system of Ukraine risks to be hollow. What will happen to Ukraine in 2019, when millions of cubic meters will flood other people’s pipes?
What are we talking about?
Today Ukraine has one of the world’s largest gas transportation system. She is able to take 288 billion cubic meters and send on to Europe 178.5 billion
Own consumption of gas by Ukraine falls the last two decades. The most extensive work on the replacement of gas with coal was carried out in 2008-2009 that allowed in 2012 to reduce the consumption of natural gas to 54 billion cubic meters. Well in 2015, thanks to the loss of population, the shrinkage of the industrial sector, the drop in consumption rates could reduce demand for gas and at up to 33 billion cubic meters. This number is required Ukraine to normal life.
In the country the decline in gas consumption is perceived as an achievement. But the drop in the volume of transit gas is found sharply negative. In 2011 Ukraine was pumped to Europe 104 billion cubic meters in 2015, only 59 billion — and millions and millions in lost hryvnia.
By the way, about it. Income of Ukraine from gas transit in 2015 amounted to $ 2 billion. In the same year, “Naftogaz of Ukraine” announced a net profit of 53.5 billion, which translated into dollars gives 2.05 billion. The calculation of Ukraine is clear — reduce the consumption of gas, possibly grafting on cheaper coal, thus extracting the maximum profit from the gas transit. Still traded and trying to blackmail Moscow.
Southern offensive
The project “Turkish stream” consists of two lines with a capacity of almost 16 billion cubic meters each. When one of the threads purely Ottoman — on it will supply gas for internal consumption of the country. Thus, by 2019 all the essential Turkey natural gas will be supplied directly through Russia, through the existing Blue stream and “Turkish stream.”
The second string of the gas pipeline is intended for European consumers: the Balkan countries, Romania, Italy, and here is the interesting detail — according to the contract, Gazprom has the right not to build this line. On the one hand, it’s kind of necessary in case if the European Union balked and refused to build infrastructure on their part. Then we thread it seems like build makes no sense. But, on the other hand, we still need to persuade the EU to obtain gas to bypass Ukraine is one of the main tasks of modern Russia, and to take back we can’t. Why not to build the second thread of the “Turkish stream” we can only be the case if from the South the EU will be built another pipeline. From a purely economic point of view, it is necessary to return to the “South stream” — it is cheaper, and Turkey less leverage.
But, no matter how developed, the southern route will wahlestedt of Ukrainian transit a minimum of 32 billion cubic meters.
The Northern front
Agreement on the “Nord stream — 2” not yet achieved — Poland strongly resisted, defending the interests of the United States. But given that the pipe for the pipeline has already been shipped, Russia intends to seek resolution of problems in the near future.
The capacity of “Nord stream — 2” is 55 billion cubic meters a year, and its construction is also going to finish by 2019.
What will happen?
In the same 2019 deadline of the Treaty of transit signed “naftogazom” and “Gazprom”. In sum, the southern and Northern pipelines do not just deprive Ukraine of the status of a transit country, but completely eliminate the very necessity of its use for delivery of gas to Europe.
“Gazprom” even has threatened not to sign the new agreement on transit. But he doesn’t mean it is likely the contract will be signed, just in case, but without gas supply. But there is one detail — Gazprom plans by 2020 to get rid of 4 thousand kilometers of main pipelines, i.e. to dismantle a large part inherited from the Soviet Union pipelines. After that, the capacity of Ukrainian transit will drop to 10-15 billion cubic meters per year.
Why would he do it? Just because it’s obsolete pipelines. On the Ukrainian side, by the way, these pipes are laid, only they are in the worst condition.
What will this mean for Ukraine?
Minus two billion dollars in revenue for the state, loss-making Naftogaz and hundreds of kilometers of unused gas pipeline, which, however, is not necessary to dismantle — even rust.
Whether there will be in Ukraine from this collapse? Probably not. Russia and the Ukraine is not the first winter with a sinking heart watch — freeze or not? But although the Ukrainians feel cold, but each time the cold overwinter. The state is a very strong thing, and just so it is not destroyed. But by 2019-2020 years Ukraine will approach the border of the tensile strength of the Soviet power system.
By 2020, the reduction in coal-fired power plants during their closure will lead to a shortage of three thousand MW. The deficit will be increased incrementally and by 2025 will amount to seven thousand of the IMF.
But even sadder is that the existing in Ukraine nuclear power plants will begin to crumble also after 2020.
In the aggregate by 2025, this would reduce the production capacity of electricity at 1/5 and more. To extend the life of at least the first ten of the reactors will require more than a billion dollars, but we need to build new units to replace, but it’s half a billion dollars apiece. If Ukraine can not start to build them, with the profits from the transit of gas, what will she do when the profits gone?
Forecast
After 2020, the country will begin really serious problem. The lack of transit, lack of coal, the closure of fossil and nuclear power plants, low-income population, not allowing it to repeatedly raise utility tariffs, will lead to what will have to pay industry, whose stop will be to compensate for the power deficit, and growing unemployment will lead to a healthy population in a neighbouring country, which again will reduce the consumption of electricity. Well, the natural population decline should not be forgotten.
Exactly what happens when you shoot yourself in the foot, and then another and waiting for infection. But, on the other hand, it is Ukraine’s loss of the last lever of influence on Russia will deprive US of any interest in this area, and the country finally will be able to gain independence and begin to solve their problems.
Sergey Cherkasov
