At a time when the threat of more Russian military intervention still looms large, the nation’s energy sectors should be watched over closely, experts say. Ukraine’s invader is also its largest supplier of natural gas and nuclear fuel, which is why two think tanks have developed an action plan to protect the nation’s energy sector.
Analysts at the Nomos Center and
the New Energy of Ukraine alliance say the nation’s major task is to diversify
gas supplies. Ukraine needs 30,000 cubic meters of gas annually and reversing
gas from Slovakia can give 5,000 to 10,000 thousand cubic meters every year
while Poland and Hungary can provide an additional 2,000 cubic meters, said Valeriy
Borovyk, chairman of New Energy of Ukraine alliance, on March 4.
While reverse gas transit already exists between
Poland and Hungary and can be renewed, EU Energy Minster Günter Oettinger announced
on March 4 that Slovakia is ready to reverse gas flow to Ukraine. He said
negotiations will start on March 19.
But reversing gas supplies will not be enough. Alternative
energy development is also stipulated in the plan. Apart from solar and wind
power energy, Borovyk noted that shale gas is an important source of energy. In
response to rumors that production-sharing agreements with Shell and Chevron
will be revised, he said, “it won’t be right.”
“We have high hopes the shale gas projects will be
realized. If those will be postponed or revised, no one will ever come here,”
Borovyk says.
Meanwhile, Russian President Vladimir Putin announced
on March 4 that Ukraine’s 30 percent gas discount that it received in December 2013
will expire this month. As of April 1, they will rise from around $270 per
1,000 cubic meters to nearly $400. Borovyk says the
next task for Ukraine’s government is to take Russia to task in the go to the
Arbitration Institute of the Stockholm Chamber of Commerce. The price that
Ukraine has mostly paid to Russia since 2009 has been one of the highest in
Europe.
“We have to
appeal to make changes to the contract regarding the conditions of import,”
Borovyk says, referring to the successful arbitrage cases of Austria and Poland
against Russia’s Gazprom. “Also, a working
group should be established to possibly breaking off the contract and a sign a new
one.”
In the meantime Borovyk says the government should start
revising energy tariffs which is also among the key requirements of the
International Monetary Fund. At
around $100 per 1,000 cubic meters, Ukraine’s household gas and heating tariffs
are among the lowest in Europe.
“Together with the IMF we need to develop a plan for
raising tariffs as well as revising subsidies by identifying the most
vulnerable social groups. Others should pay the full price,” Borovyk says.
“Even though it’s a socially unpopular decision, we’ll have to cope with it,”
he says.
Kyiv Pos staff writer Anastasia
Forina can be reached at [email protected].
