A joint gas hub with Poland: Hennadii Riabtsev explains what hinders Ukraine’s ambitious plans
19 December 2024 14:36
OPINION
Ukraine and Poland are planning to create a joint gas hub, the Ukrainian Energy Ministry has announced. According to the plan, Ukrainian gas storage facilities and Polish LNG terminals together should provide a new effective business model for supplying Europe with gas without Russia.
The Ukrainian side has already officially addressed the partners with a proposal to sign documents to start developing interstate entry-exit points of the GTS between Ukraine and Poland, as well as to increase the installed capacity.
“Our forecasts are clear. We expect the introduction of long-term and medium-term contracting procedures in a business mechanism similar to business models in the United States. This will help Ukraine and Poland to store as much gas as needed for the whole of Eastern Europe. In this particular case, this deregulated and physically developed capacity between our governments will help to redirect some of the natural gas that was previously supplied by the Russians,”
– said Deputy Minister of Energy of Ukraine Mykola Kolisnyk during the Energy Club’s online discussion “Legal aspects of gas supply diversification in Poland”.
Follow us on Telegram: the main news in brief
Why does Poland need Ukraine?
"Komersant Ukrainian" asked experts for their opinion on this issue, and it turned out that not everyone considers this idea promising. Energy expert Gennadiy Ryabtsev believes that such a project could face serious obstacles, the main one being Ukraine’s lack of membership in the European Union.
“To be honest, I don’t know why Poland needs Ukraine in this regard,”
– said the expert. According to him, Poland has all the prerequisites to create a gas hub on its own.
“First, Poland has the opportunity to receive gas in liquefied form through the terminal in Świnoujście. It is possible to receive gas through the gas pipelines that connect Poland and Germany with the countries of southeastern Europe. That is, there are pipes from the south. And they have their own gas storage facilities, albeit small ones,”
– says the expert.
The expert emphasizes that a real gas hub needs a liquid market to function, and Poland has it even without Ukraine.
“Only liquid markets become hubs, and Poland can become a hub. Because there is an opportunity to sell gas there, i.e. to do it constantly, throughout the year, and in sufficiently large volumes. For example, if you sell 10 billion cubic meters a year, you can already say that the hub will be liquid,”
– ryabtsev believes.
The expert agrees that Ukraine’s provision of its own gas storage facilities could be part of this business model. However, he believes that this is impossible until Ukraine enters the EU legal space.
“For someone to store this gas, Ukraine needs to be a member of the EU. Only then will it be possible to create a gas hub on the basis of Ukrainian gas storage facilities. Then it will be a really good platform with good nodes that will allow redistributing gas in all directions and to all countries bordering Ukraine. And further through pipelines,”
– emphasized Mr. Ryabtsev.
Thus, the expert considers the idea promising, but still quite far from being realized.
Follow us on Telegram: the main news in brief
