MOSCOW – Transit tariffs for Russian gas to Europe via Ukraine should be competitive compared to other major gas suppliers, while the open question remains regarding factoring in costs for the modernization of the Ukrainian gas transmission system (GTS) into tariffs, Russian Energy Minister Alexander Novak said in an interview with Interfax.
He said that the issue of new European approaches to the formulation of gas transportation tariffs was discussed at a meeting between Russian, Ukrainian and EU gas experts.
“In the EU, as is well known, they do not pay for the pumping of, say, 1,000 cubic meters of gas for 100 km, but for entrance “into” and exit “from” the so-called “entrance-exit” zone of a gas transmission system, and the account is carried out in units of energy and not volumes of gas. The methodology for setting these tariffs is not very simple and experts at the meetings discussed its nuances,” the minister said.
“In any case, tariffs for the transportation of gas via the Ukrainian GTS should be competitive in comparison to other gas supply options. Otherwise such transit will be uneconomical for us,” the minister said.
He said that it is currently difficult to say how much the tariffs will be exactly and how precisely the costs of modernizing the Ukrainian GTS will be factored into them.
“At present no one has conducted an analysis of what the tariffs will be. This can be determined only after detailed calculations have been conducted, made in accordance with the agreed upon methodology. There is also another problem: the Ukrainian GTS is in a very run-down condition, its modernization requires large investment. And it is also currently unclear how this will impact on transit tariffs. The methodology should take this obligation into account,” Novak said.
He said that the issue of transit tariffs for Ukrainian gas is not being discussed by experts at the moment.
“Not yet. Only the presentation of European legislation regarding the regulation of gas transportation infrastructure is currently at the level of experts. Supply and demand estimates on the European market and future European gas import volumes were also discussed,” Novak said.
