Gazprom’s ‘cat-and-mouse’ transit games

“The technical state of Ukraine’s gas transmission system is now in such a condition that it cannot circulate. In such a case it needs to be frankly told about. One must figure out… whether Ukraine’s gas-supply system is capable of circulating gas at all”
V.Putin, January, 13th
One should pay a tribute to Messrs. Medvedev and Putin – unlike our politicians, they do not grudge the time for the detailed conversations with the technical specialists of Gazprom, entering into all the details of gas transportation. That’s why they have prepared a sabin card to beat in advance – the export gas feeding procedure into Ukrainian gas transmission network under which the Ukrainians THEMSELVES would refuse to pump this fuel, in such a way once again proving their transit insecurity to Europeans. The ‘Pseudotransit’ operation was put across masterfully and with impunity by Kremlin on January, 13th . And when some of the Europeans took Ukraine’s side, they had their mouth stopped with gas ‘carrot’, so that they would not have a loose tongue.
Technical mousetrap
Thus, on January 13th at 01:00 a.m. Gazprom demanded from Neftegaz to deliver 76.6 mln cubic meters of gas to the Balkans and Macedonia as a test pump. The route was from ‘Sudzha’ gas pumping station to ‘Orlovka’ gas pumping station (see the table), where the European watch committee were waiting ready to monitor the transit process. Moscow was opening its gas shut-off at 09:00 a.m.
Since early morning the whole Europe with bated breath was watching the blue-sky fuel entering the Ukrainian gas pipeline system. The time passed, and there stayed the same chilling ‘zero’ at the output.
They were tushing and getting unholy nervous in Brussels. Unlike in Brussels, Gazprom was not surprised at all. Why? Everything was quite simple – in Kremlin they knew from the very beginning that Ukraine will not be able to let the gas pass through the pipe. Making sure by the afternoon that the aim had been achieved, Moscow told Europe - do you still want to have this ambilevous carrier as a partner?
Transit trick of Gazprom turned out to be successful by the following reasons.
Firstly, Moscow chose almost unreal technical route, threatening the whole gas-supply system of Ukraine.
Traditionally the export gas (see the scheme) was moving from east to west by two main channels - ‘Urengoy – Uzhgorod’ main line (‘Sudzha’ gas pumping station) and ‘Soyuz’ (‘Valuiki’ gas pumping station), some part of the gas being used by industry in the south-east and than compensated on the way from underground storages of Western Ukraine and Ukrainian gas wells in the regions.

After the gas flows for Ukraine had been stopped, we kept on taking Russian gas off for our suppliers on the main lines, compensating the difference (200-250 mln cubic meters) at the output. And one had to pump gas from underground gas storage in reverse – from west to east, center, and south, when the whole process of gas transit had stopped. To meet those needs the work of the compressor stations was changed. Besides, the eastern parts began using the reserves from storages in Kharkov, Poltava, and Lugansk regions.
The route suggested by Moscow violated the traditional gas supply pattern, as far as gas has always been transported to the Balkans through ‘Soyuz’ main line. To tell the truth, to pump gas from ‘Urengoy – Uzhgorod’ main line into ‘Soyuz’ through the binding pipelines of smaller diameter, is rather difficult.
Even if imagine that Neftegaz would do a heroic deed and reset the compressor stations, one would have to stop supplying gas to the eastern parts automatically. The thing Gazprom has chosen a rather interesting route, the one, crossing the entire gas pipeline system diagonally, that means that all the compressor stations would have to work to supply gas stream into Odessa region only. Thus one would have to hamper the gas supplies from our western underground storages for the half of the country.
Surely, in Gazprom they hit back: well, do not redirect gas stream from one main pipeline into another. Just compensate the volume needed for ‘Soyuz’ from your eastern underground storages. But this time this would have left the whole south-east without gas. Moreover, the storages are not capacious enough and are almost empty there. For instance, in Kharkov region only there has been left no more than 20 per cent of fuel. Even pumping out the whole storage for export it would not be enough for more than a couple of days. In goes without saying that the next day Gazprom would request not for 76, but, let’s say, 100-120 mln cubic meters.
Secondly, Ukraine would have to compensate technological gas pumping on its own cost, emptying the country’s storages along the way and leaving the southern parts of the country without fuel.
It is known, that the gas in the pipe goes through pressure, which is gradually declining. It is maintained with the help of gas-compressor units, which they have on the compressor stations. In its turn, gas-compressor units use part of its export gas from the pipe for their work. This gas is considered to be technological, as far as it combusts in turbine. In its turn, to restore the initial volumes that enter our gas pipeline system for Europe, Ukraine adds the lacking millions of cubic meters from its storages at the output, instead of the gas used for pumping.
When it goes about the traditional route through Western Ukraine, there are no problems here -here are situated underground storages. But taking into consideration the route chosen by Gazprom, which means obtaining Gazprom’s 76 mln cubic meters from our gas transportation system at the output, Neftegaz had to find the reserve of approximately 5-6 mln cubic meters somewhere in Odessa region. It is for January 13th only. On one hand, there are no underground storages there. To pump from the east means to put Kharkov or Donetsk region on short rations. On the other hand, on the 14th of January the governor of Odessa region Mr. Serdyuk marked: the fuel does not go at all to the main pipeline, the one supporting the whole region. In other words, the national joint stock company has big problems with pumping gas from Western Ukraine to the south.
Thirdly, the route “ideally” passed through the territory of Moldova (see the scheme), where there is no European watch committee at the gas measuring units and in underground storages.
In Gazprom they understood pretty well what it will end in on practice. From the 76 mln cubic meters declared 13.9 are meant for Moldova. Anyway, there is no guarantee that Moldova, which has been staying without gas for several days already, will not take more it can take. On one hand, according to the protocol, there are no European supervisors on Moldavian ‘Kaushany’ pumping station. On the other hand, nothing prevents Moldova from playing along with Russia, as far as half of ‘Moldovagaz’ JV belongs to Gazprom. Even if Ukraine tries to press Moldova to bring back the undue gas, Kishinyov will answer: we have utilized the whole stock, and there is no gas to compensate as far as there are no underground storages.
As a result the monitoring committee at our Ukrainian ‘Orlovka’ gas pumping station would register not 62.7 mln, but, let’s say, 50 mln cubic meters of fuel running in the Balkans’ direction. And Europe would eventually and vividly make sure that Ukrainians do steal the gas.
Informational collapse and Gazprom’s profit
As a matter of fact, Ukraine has stalemated itself on its own by failing its informational defense.
First, it is Yuschenko, Timoshenko, and Dubina, the Head of the national joint stock company, that were crying bravely at the Europeans the whole Monday: in any situation we will be able secure no-stop transit tomorrow. Let just Russia give gas first. Though Dubina would time from time say robustly that we need 36 hours for technical restoration of the obverse gas pipeline system. But the guys on Bankovaya and Grushevskogo were too in a hurry in their desire to blandish Brussels to be able to pay attention to the following ‘trifles’: which way to let gas go and where Ukraine will take technological gas from. That was the very purely Ukrainian goof that they had been waiting for in Moscow, where the unreal transition route had been made up beforehand.
It was only on January 14th that Dubina started vaticinating actively and publicly about the commemorable 36 hours and prepared the technical protocol on principles of restoring the transit which makes it impossible for NJSC to fulfill its obligations if not signed.
Secondly, when it became known what kind of “surprise” Gazprom has prepared, Ukrainian politicians preferred to cry about malicious Russia instead of demonstrating Europe the technical details of IMPOSSIBILITY of transit under such conditions.
Instead of telling in word that Gazprom wanted to sabotage the internal gas-supply system of Ukraine, like Yuschenko and Dubina did, one shoud have demonstrated it in the central control room of ‘Ukrtransgaz’. In the very same way as it did Putin on January, 13th , him and Miller making the whole show for the Europeans in the central control room of Gazprom. Hey, ladies and gentlemen, here the lamp shows that they refuse to accept the transit. Ivan Ivanych will show you all the details. Those shots have traveled the whole world. And, according to the Europeans’ feedback, almost nobody discounted Putin’s story. That allowed Gazprom to continue the whole farce not only by requesting for the transit by same route, but also adding 22 mln cubic meters to the previous volume for Slovakia.
Well, some Europeans (they are not all stupid there as they might think in the Kremlin) did slightly tried to object to Moscow telling that Ukraine’s furnished the proof of impossibility of pumping gas by the same route. Thus, the prime-minister of Slovakia Mr.Fitzo marked this on January, 14th. Putin frankly answered in return, “Whoever submits any papers I am ready to throw all these papers into the fire”. And immediately decided to stop the Slovak’s mouth with gas: well, Gazprom can negotiate that Neftegaz will pump directly to Slovakia 20 mln cubic meters of gas daily from Western Ukrainian underground gas storages. It was the broad hint: nobody can in return object publicly to official position of Russia that “khokhols” sabotage the transit.

Which bonuses the wise transit maneuver has brought to Gazprom?
1. Russia began handling one more figure of Ukraine’s gas debt which we will have to pay at the price of 450-470 USD/per cubic meter. One has added to the 86 mln cubic meters “stolen” by January 7th , 140 mln cubic meters more. According to the Kremlin version, the lack of this volume led to the situation that Ukraine could not assure the pressure needed to resume gas transit.
Actually, there is a grain of truth in it. The Neftegaz’s supply being cut, the pressure inside gas transport system declined: the consumers had taken away the access of gas. So even if Russia had asked for direct transit through ‘Urengoy-Uzhgorod’, we would have had not only to compensate technological gas but to add some to stabilize the total pressure in the pipe. It is very difficult to do it from the technical point of view. That’s why Dubina is talking about resuming daily shipments of not less than 300 mln cubic meters, on a long view filling the main line from underground storage at the output. It is quite another matter, whether we can say that we have stolen the Russian gas by pumping it out from the underground storage…
2. The Kremlin once again demonstrated that the technical state of Ukrainian gas-supply system leaves much to be desired. Here we make the following conclusions: one must develop alternative routes (“Severnyi Potok”, “Yuzhnyi Potok”) and create a consortium on management and modernization.
3. The transition war somehow suppresses the fact that Ukraine has been living at the cost of its own storages for two weeks already. And they are gradually coming to the end. Nevertheless Gazprom has a specious excuse to table the negotiations, appealing to the overriding need to restore shipments to Europe. Meanwhile the opposition, business, and the society suffering of the diminishing gas feeding must put pressure on Timoshenko and Yuschenko making them more cooperative. Nice example is the application of the newly-created Parliament Gas Commission headed by Bogoslovskaya: Timoshenko-Putin memorandum dissolved. There’s worse to come.
In Moscow they keep on waiting for a good moment, realizing that the capitulation of Kiev is around the corner. And soon Ukraine will be ready to contract on hard terms. And, as the last days showed, the Kremlin has a lot of aces left “to impel to peace” yet.
Dmitriy Korneychuk