One of the contenders for the post of the President of Ukraine, the leader of the Batkivshchyna Party, Yulia Tymoshenko, on Friday, September 28, opposed the sale of 49 percent of the shares of the Ukrainian gas transportation system (GTS) to a foreign firm. Tymoshenko promised that if she won the presidential elections scheduled for March 2019, she would liquidate the state-owned Naftogaz of Ukraine and load the GTS with domestic gas instead of the Russian gas transit to the EU countries.
Gas plans and promises of Yulia Tymoshenko
Former Prime Minister of Ukraine Yulia Tymoshenko stated at a press conference in Kiev about the inadmissibility of selling 49 percent of shares in the GTS of Ukraine. The reason for this was the initiative of NJSC "Naftogaz of Ukraine" and the operator of the GTS - the company "Trunk pipelines of Ukraine" (укр. Магістральні газопроводи України), which in early September issued a "road map" for sale to foreign investors almost half of the shares of the GTS. "I understood that Petro Poroshenko wants to pick it up with the help of dummies, so they announced their intention to sell 49 percent of the GTS", - said Tymoshenko.
She advocated the preservation of the GTS in state ownership and promised to liquidate Naftogaz of Ukraine as an "intermediary that is not needed". Tymoshenko also estimated GTS in $ 300 bln and accused President Poroshenko of trying to buy half of this asset "at a price 20 times less" than it costs. The ex-prime minister called for Ukraine to increase its own gas production to "export it to the EU", and promised to cut the cost of gas for the population "at least twice".
How much will the Ukrainian gas transportation system cost and who will buy it?
Interviewed DW experts consider the promises and plans of Yulia Tymoshenko to be political populism. The head of the Bureau of Integrated Analysis and Forecasts Sergiy Dyachenko recalled that the PricewaterhouseCoopers international audit company estimated the price of Ukrainian gas transportation system to be $ 14 billion. If Tymoshenko knows where to take the money for the modernization of the GTS, and if possible without Western capital involvement, to integrate it into the European gas transmission system and use the European legal system, then the GTS can not be privatized, the expert said.
He is convinced that it is impossible for President Poroshenko to buy part of Ukrainian GTS. According to Dyachenko, the buyer of the asset will be "examined under a microscope" by international audit bodies, while the identity of the final benetsifiara of any company can now be set for a few hours. For this reason, according to Dyachenko, neither Poroshenko, nor Russia's Gazprom, they have no chance to get half of Ukraine's GTS. "Only a very serious structure will be able to win the competition and to solve financial and other serious issues", - said the expert.
Regarding the increase in the volume of domestic gas production, here Dyachenko reminded that in the end of the 70s of the last century, Ukraine used to produce 78 billion of natural gas annually, and covered not only domestic consumption but also supplied gas to some other republics of the USSR. However, today, the expert said, the fields are deplited, and the country manages to produce only about 20 billion annually. According to Diachenko, increasing extraction at the expense of new deposits can not be done until the mid-2020s - and only to the level of 30-34 billion cubic meters per year. And it will not satisfy the domestic demand and simultaneous export of gas to the EU.
Gas geopolitics of Ukraine
Mykhailo Gonchar, President of the Center for Global Studies "Strategy-XXI", did not exclude that the government could indeed try to sell part of the GTS to a foreign figurehead, affiliated with the Ukrainian oligarchs. According to the expert, such an attempt is predetermined to failure, since it was previously only referred to the participation of foreign companies in the consortium for managing the GTS, and not the sale of part of its shares. "In response to Poroshenko's political opponents, we see pre-election populism, and this will not go to the benefit of either side," added Gonchar.
In the structures close to Naftogaz of Ukraine, involvement in the management of the GTS of an American company is considered better than German or French. According to officials in private conversations, in the current geopolitical situation, only the United States can talk fairly rigidly with Russia in order to achieve the necessary volumes of pumping Russian gas through Ukraine. In Moscow, they are threatened to reduce them almost 10 times after the end of 2018, termination of a transit contract with Kyiv and the expected launch of the Nord Stream 2.
According to Yulia Tymoshenko, one more opportunity to strengthen Ukraine's energy security could be the import of liquefied gas through the ports of Odessa and Mykolaiv. However, Mikhail Gonchar denies, the position of Turkey, which opposes the passage of gas carriers through the Bosphorus Strait, remains unshakable, and Tymoshenko will not be able to change it. "In addition, neither Mykolaiv nor Kherson will be able to receive ocean-going vessels, and only the southern port near Odessa has sufficient deep water channel for this," the expert noted.
