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The prospect of creating a gas hub in Ukraine


Good morning, colleagues!
Although, after so many years, good morning, Friends!

In these difficult times for all of us, it’s especially excited to greet all of you today!

First of all, I would like to express my gratitude to our long-term partner Energy Club for the invitation and the excellent organization of the forum.

In today's realities, it is rather difficult to predict any prospects, however, as market participants, we have always been interested in the prospect of creating a gas hub in Ukraine, it would probably really be correct to call it an Eastern European gas hub.

As we know, in the past, we considered a number of models, they seemed real, the main feature all of these models was:
the long-term direction of the movement of energy resources from east to west, it meant, the basis of most hub models has always been transit from Russia to Europe, based on the idea of free energy markets in Europe and the third energy package, and the motivation was the integration of the Ukrainian and European energy systems and, as a result: the shift of points of transactions to the northern and eastern borders of Ukraine, increase of liquidity on local markets and new possibilities for natural gas transaction operation.

At the moment, due to the unjustified war of Russia against Ukraine, we are seeing global changes in the structure of natural gas supplies to Europe, so the East-West model is no longer relevant, Gazprom and Russia are extremely fast losing their share in the European gas markets.
Today we can confidently assert: the Russian doctrine of energy as weapon of political pressure and chantage has been globally failed.

What prospects for creating a gas hub in Ukraine can we talk about at the moment:
I would like just to highlight a number of clear advantages of the Ukrainian Gas Transmission System and some points that in my mind should be done in future to realize an idea of the gas hub in Ukraine:

1. A powerful gas transmission system, which is one of the largest and most extensive in Europe, the system is balanced, absolutely stable and stress-resistant, as practice has shown, the system is flexible and capable of solving the most complex technical problems in the shortest possible time. The system is under control of the GTS operator, which meets almost all the requirements of European standards.
At the moment, the operator offers a variety of service packages for the sale of standardized trading products at quite competitive rates in Europe.

2. One of the largest gas storage facilities in Europe operated by a gas storage operator that provides storage services to residents and non-residents, including a custom warehouse service, tariffs are among the lowest in Europe.
3. Operating interconnectors with most of the related European gas transmission system operators, which allows for import-export operations, including virtual transactions.

What I think needs to be done in the future:

1. Completion of the construction of interconnectors with all related operators to increase export-import capacities and gain access to new transportation routes.
2. Promoting the role of the Ukrainian GTS as peak load balancing system for Europe, due to the presence of powerful transport capabilities and large free natural gas storage capacities. As it was partly realized two years ago.
3. Activation of implementation biomethane gas projects for the export of biomethane to EU with assistance of the Government of Ukraine and European Commission, as one of the most perspective area of green energy in the gas sector.
4. Development of a highly liquid trading platform for natural gas trading, creating Ukrainian gas index.
5. Construction of terminal and port facility for receiving LNG.

In conditions of war, as well as the high competition of the gas transportation systems of our continent, rapid development of routes for the supply of natural gas, we see- the difficult challenges await us, but I am sure nearest future Ukraine will take one of the fundamental niches in the new architecture of the European system of energy markets and security, where there is no place for aggression, threats and chantage.

Thank you for your attention!
Glory to Ukraine!