Azarov: No Alternative to GTS Modernisation

Ukrainian Prime Minister Mykola Azarov has said that modernisation of the country's gas transport system (GTS) is essential to protect against shortages caused by cold weather conditions.

At a meeting with German MP Carl George Velman and engineering service provider Ferrostaal, Prime Minister Azarov said that modernisation of the GTS would protect the country from shortages better than the Nord Stream or South Stream pipelines.

"Modernization of the Ukrainian GTS is the cheapest and most reliable way to ensure an uninterrupted supply of energy to Europe" he said.

"Anomalous frost showed that neither the Nord Stream nor the South Stream [have] reliable storage facilities that could be involved in a period of abnormally low temperatures. Therefore, there are no alternatives to modernization of the Ukrainian gas transportation system because neither Nord Stream nor South Stream remove the risk caused by abnormally low temperatures."

Measures have already begun to improve the GTS. Yesterday it was expected that Ferrostaal would reach an agreement with national gas company Naftogaz Ukrainy to reconstruct part of the gas transport system. This agreement would see the two companies jointly cooperate on the repair and rejuvenation of the GTS.

Russia also continues to work with Ukraine to ensure energy security during cold weather conditions, in particular to avoid the shortages of supply seen in a cold snap in February this year. Ukrainian Minister for Energy Yuriy Boiko yesterday met with CEO of Gazprom Alexey Miller to discuss gas injection rates into the Ukrainian GTS. 

"It was stressed that the key element for Naftogaz Ukraine to successfully meet its transit obligations during the upcoming autumn/winter period resided in providing the required gas volumes for the Ukrainian UGS facilities," a statement from Gazprom said last night.