Ukraine seeks to redirect Russian gas supplies to Ukraine

Ukraine seeks to redirect Russian gas supplies to Ukraine

Ukraine is working behind the scenes to convince western allies to move Russia's shipments of natural gas from the Nord Stream 1 pipeline to Ukraine's pipeline, increasing Kyiv's leverage in its conflict with Russia, energy officials told Reuters.

They said that it's going to force Russia to move more of its Europe-bound gas through Ukraine. That would make Moscow pay more transit fees that could help Ukraine's wartime defense and prevent Russia from damaging Ukraine's gas pipelines, they told lawmakers and Biden administration officials in Washington last week.

Representatives from Ukraine's gas pipeline operator and gas firm Naftogaz spent a week in Washington meeting administration officials and congressional lawmakers to urge them to convince Germany and other European allies to adopt the plan.

Russia depends on us to transport gas from Russia to Europe. Olga Bielkova, director of international affairs for the Gas Transit System Operator of Ukraine, said in an interview in Washington that this is something to leverage in our discussions with them and Europe can help.

A White House official and Germany's economy ministry didn't want to say anything. On Wednesday, Germany said it will stop importing oil by the end of the year and gas will follow, but did not specify when.

Germany has stopped Russia's Nord Stream 2 gas project, which was designed to double gas shipments into Germany, as a punishment for Russia's February invasion of Ukraine. The $11 billion project was finished late last year but never started.

The Nord Stream 1 pipeline can be a tough sell for Germany and the rest of Europe, according to analysts.

David Goldwyn, a former State Department special envoy, said that it does not increase the security of supply to Europe.

The move could cause legal dangers. Christian Egenhofer of the Brussels-based Centre for European Policy Studies said that EU action against Russian imports could be an illegal breach of supply contracts.

Russia currently moves 55 billion cubic meters of natural gas per year to Germany on Nord Stream 1. It moves another 40 bcm to Europe through Ukraine's gas transport system and pays transit fees to Ukraine in U.S. dollars.

Ukraine's pipeline system has spare capacity of more than 100 bcm and could easily absorb the Nord Stream 1 flow.

Daniel Vajdich, an adviser to Naftogaz, said that by switching all of Nord Stream 1 to the Ukraine system would give Kyiv more leverage over Moscow and show the Kremlin that Europe is tying its own security to that of Ukraine. The officials proposed that 40% of Nord Stream 1's capacity be redirected immediately to the Ukrainian pipeline, gradually increasing to 100% by April 2023. The EU states would have time to build up winter stockpiles and diversify their stockpiles.

The officials said they wanted U.S. support to allow Ukraine to get access to LNG terminals in Turkey.

Svitlana Zalischuk, an adviser to the CEO of Naftogaz, said Ukraine needs to secure its own supply of gas before its winter heating season begins in October.