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Slovak PM criticises Ukraine over sanctions against Russia

Ukraine's possible sanctions against Russian gas transit will jeopardise the economic interests of European countries, Slovak Prime Minister Robert Fico said on Thursday.

He said "it's weird" that Ukraine, which has signed an association agreement with the European Union and is receiving its aid, was taking "unilateral steps" that jeopardised the economic interests of individual EU countries, The Association Press quoted Fico as saying.

At a meeting with Slovensky Plynarensky Priemysel (SPP), Slovakia's gas importer, earlier in the day, Fico said his country had enough gas in underground storage facilities to last five months and could also get gas in reverse-flow mode from the Czech Republic and Austria.

The company has 1.36 billion cubic metres of gas in underground storage facilities within the country, and this amount will grow to 1.43 billion cubic metres by September 1. This will be enough to meet the SPP customers' needs for about five months.

However if supplies do not resume by that time, SPP will have to buy gas on the spot market and get it in reverse-flow mode from the Czech Republic and Austria.

Naftogaz of Ukraine said on August 11 that gas transit through Ukraine to Europe could be carried out by companies not affected by Ukrainian sanctions if they concluded direct contracts with Naftogaz.

However, a ban on gas transit can be removed from the list of sanctions, experts told ITAR-TASS after Naftogaz of Ukraine had softened its stance on Wednesday.

Prime Minister Arseniy Yatsenyuk threatened to stop Russian gas transit across Ukraine as part of the sanctions against Moscow.

The statement raised concerns in Europe. The German energy concern RWE, one of the leading European partners of Russian Gazprom, said it was hoping that Naftogaz of Ukraine will continue the transit of gas to Europe.

Slovensky Plynarensky Priemysel (SPP), Slovenia's gas importer, said it was watching the situation and considering it a priority to "ensure uninterrupted gas supplies to consumers".

Another German company, E.ON, said it was hoping that the sanctions would not affect gas supplies from Russia.

"PGNiG is closely watching the situation and is ready to take necessary steps when the result [of Ukraine's sanctions] becomes known," the Polish gas importing company said.

Germany's Wintershall said it was also watching the situation and "does not want to spread rumours about the sanctions being prepared and their possible consequences".

It said any disruption of gas transit across Ukraine "will not affect trading operations of WINGAS and its consumers in Germany and Western Europe".

WINGAS receives gas from the producers in the Northern Sea and Russia and less than 10% of it transported through Ukraine, with the bulk of it going by the Yamal-Europe pipelines via Belarus and Poland, and Nord Stream.

Wintershall said its underground gas storage facilities were also sufficiently filled and diversification of gas supply routes from Russia to Europe, including the construction of South Stream pipeline, would reduce transportation costs and ensure safe supplies to Europe.

Yatsenyuk also promised to seek the assistance of American and European partners in order to modernise the Ukrainian gas transportation system.

In June, Ukraine asked the European Union and the United States to help to upgrade its gas transportation system and then operate it. Kiev put the cost of the project at $3-5.3 billion, which it said would secure gas transit to Europe in the amount of 145 billion cubic metres a year until 2030.

But Gazprom experts say that the modernisation of the Ukrainian gas transportation system can eventually cost $16 billion.

The throughput capacity of the Ukrainian gas transportation is 288 billion cubic metres system at the entrance and 178.5 billion cubic meters at the exit, including 142.5 billion cubic metres to European countries and 3.5 billion cubic metres to Moldova. Natural gas transit through Ukraine to Europe and CIS countries in 2011 increased by 5.7% from 2010 to 104,197,067,000 cubic metres, including to Western Europe by 5.9% to 101,098,013,000 cubic metres, but decreased by 2.4% to 3,099,054,000 cubic metres to CIS countries.

Ukraine's gas transportation system consists of 72 compressor stations, 110 production facilities and 1,451 gas distribution stations. The overall length of gas pipelines operated by the company is 38,600 kilometres, including 22,200 kilometres of trunk pipelines and 16,400 kilometres of extensions.

[Source: Itar Tass, Bratislava, 14Aug14]

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