A drop in the ocean?
Eastern approaches 2014-04-30
Summary:
On April 28th a deal was clinched between Slovakia and Ukraine to send natural gas from west to east, as part of efforts to reduce Kiev’s dependence on Russian gas. The amount in play, however, is unlikely to make much difference should the ultimate crisis scenario play out and Russian giant Gazprom turns off the tap.
Ukraine receives about half of its 55 billion cubic metres (bcm) annual natural gas supply from Russia. In recent months Gazprom nearly doubled the price Ukraine pays for it (in part by removing previous discounts). Yet the deal with Slovakia looks set to pump at a rate of only 3 bcm per year to start with, much less than officials in Kiev were hoping for.
"At the political level, it’s an important display of solidarity,” said Cillian O’Donoghue, a Brussels-based energy analyst for Fleishman-Hillard, but at the technical level there is real doubt whether Ukraine can survive a shut off. “If you do the math it doesn’t add up."
Gazprom loomed large in the Slovak-Ukrainian...Continue reading