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Interview of Ukrainian envoy to Ankara Sergiy Korsunsky for Anadolu Agency: Ukraine offers gas storage facilties for Turkey's use
17 May 2016 16:39

Ukraine offers gas storage facilties for Turkey's use
- Ukraine's gas storage is available for Turkey, says Ukrainian ambassador

Ukraine and Turkey are working together to allow Turkish companies to use Ukraine's gas storage facilities in Western Ukraine, said Sergiy Korsunsky, Ukrainian ambassador to Ankara on Monday.

Korsunsky said in an exclusive interview with Anadolu Agency that a key problem for Turkey's energy is its lack of extensive gas storage facilities, despite plans to build storage facilities which Korunsky says are too small to cope with Turkey's needs.

The capacity of the Ukraine's storage is around 34 billion cubic meters (bcm), of which the country uses around 50 percent.

"It would be good if you have bigger storage. Unfortunately, Turkey does not have this geology on its territory. I think this is a problem and that is why we are working with Turkey to allow Turkish companies to use our storage in Western Ukraine. We don’t have a deal yet but Ukraine’s Naftogaz and Turkish BOTAS are holding discussions," he said, adding that experts from Turkish Petroleum Pipeline Corporation (BOTAS) have already visited Ukraine's storage facilities.

Korsunsky suggested that Turkey could diversify gas sources away from Russia and use Ukraine's facilities by sourcing from Azerbaijan and Turkmenistan.

"At this point there is one problem. The only gas you can store now is Russian, and Russia would be against it [storing gas sourced elsewhere apart from Russia]. So you cannot do it easily. But once you have gas from TANAP [Trans-Anatolian Natural Gas Pipeline], you can arrange to store gas from Azerbaijan as it will be within your legal rights," he said.

"Technically speaking, it’s not a problem to pump gas inside our storages during summertime and then use it during wintertime. Once you find alternative volumes of gas to store, you can use it in Turkey or you can sell it to the EU. It won’t be a problem," he said.

"We guarantee that whatever you put in you will receive it back whenever you need it. We have a spare capacity of at least 17-18 bcm. We recommended to BOTAŞ that Turkey can put approximately 17-18 bcm of gas into storage. Then, if market conditions are favorable, Turkey can sell it to Europe. If it’s unfavorable, you can consume it or keep it," he noted.

After Russia's invasion in Ukraine, Kiev, reluctant to depend on Russian gas, almost completely stopped buying from Russia and began buying reverse gas from Slovakia, Hungary and Poland.

He added that Ukraine is also discussing storage options with its partners in the EU.
 

- US LNG and global gas market

Korsunsky envisages that in the coming years, the gas market will be more integrated around the globe with U.S. LNG shipments in Europe and Asia which will ensure the LNG market will be similar to that of the oil market with cheaper and more abundant product.

"We would also buy U.S. LNG, but we unfortunately we don’t have LNG terminals, but we can use Turkish ones," he suggested.

"The question is how you will construct your infrastructure? If you want more LNG pipelines, build pipelines. You have many options. That’s the key," he said.

"You need to diversify your gas supply because you cannot rely anymore on Russia. You have to finish TANAP to get Azerbaijani gas, you have to work with Iran, Turkmenistan and, if there will be peace, Northern Iraq also," he said.
 

- Nord Stream II issue

The Ambassador also commented on the dangers of the Nord Stream II project which he claimed has no economic value and labeled it as a "political project."

The Nord Stream II is set to deliver Russian gas with a capacity of 55 billion cubic meters beneath the Baltic Sea through a 1,200 kilometer-route to Germany.

"Ukraine's transit system, which is in good shape, can transit up to 200 bcm of gas. Now, we transfer approx. 100-110 bcm, but we can transit more if the EU needs it. The point of Russia is to avoid Ukraine as a transit country. But not only this. What they want is to avoid many other countries in Europe and deliver gas directly to Germany," he said.

The Ukrainian diplomat explained that according to Russia, it has project partners in Germany and France, but at the same time Russia's “French partners” signed an agreement with the U.S. for 50 LNG deliveries to France.

The U.S Company Cheniere has agreements with Electricite de France for 50 cargoes of LNG for delivery through 2018. In August, Cheniere signed a deal to sell 26 LNG cargoes. In September, a second deal was signed for 24 cargoes to be delivered in 2017-2018.

"Actually what Russia is doing in Europe is using its political connections. Ukraine has already adapted its legislation to the EU energy market. So, now our transit system is open for every third party supplier. We signed the European Energy Community Treaty. We have now integrated our transit system into the European network. For the EU there is no reason not to trust us in terms of transit," he said.

"I hope Europe is wise and strong enough not to be bought by those 'bright pictures' of the Nord Stream II and fairytales about the 'insufficient' Ukrainian transit system," he added.

Many experts concur that Russia is trying to bypass Ukraine as a transit country with the Nord Stream II project, while members of the European Parliament told Anadolu Agency on May 13 that the project is politically motivated.

"We want to move the entry point to our eastern border. That means that the EU will sign an agreement with Gazprom, according to which it will buy gas on the border between Russia and Ukraine and then the EU will sign agreements with Ukraine on transit. That will put an end to any Russian speculation that our transit system is 'insecure' etc. That will be the end of Russia’s blackmail," he asserted.

He concluded by saying the Nord Stream II is a political issue, but he is hopeful of European solidarity in opposing the project.

By Murat Temizer

Anadolu Agency

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