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Perry: Poland, Ukraine To Work With U.S. To Reduce Dependence On Russian Gas

Gas Poland

The United States will work with Poland and Ukraine to reduce their dependence on Russian gas, media reported after a meeting between U.S. Energy Secretary Rick Perry and Polish and Ukrainian officials.

“We’re helping Poland to reduce its dependence on Russian gas,” Perry said, as quoted by Reuters.

“We will take every effort to diversify gas supplies to Ukraine, which is now completely dependent on Russian deliveries,” Piotr Naimski, in charge of Poland’s energy infrastructure, said.

Poland is less dependent on Russian gas than Ukraine is, which is entirely dependent on it, and is already importing U.S. liquefied natural gas. These imports are set to rise as the Polish government works to reduce its intake of Russian gas as quickly as possible and as much as possible.

Naimski said Poland was going to increase its own exports of natural gas to Ukraine, from the current 1.5 billion cubic meters a year to 6 billion cubic meters beginning in two years. The increase will apparently come from the substantial boost in the imports of U.S. LNG.

Ukraine is certainly in a more difficult position than Poland. A third of Russian gas sent to Europe passes through its eastern neighbor, and in addition to the transit fees Ukraine receives, it also receives gas for its own consumption.

Yet Ukraine’s gas delivery contract with Gazprom will expire next January and it will expire after a prolonged legal battle between the Russian giant and its smaller Ukrainian counterpart, Naftogaz Ukrainy, which the latter won. Now, the Ukrainians are worried the Russians might decide to not renew the contract and cut the country off from its gas.

The Russian side has not mentioned this possibility, though. At the moment, the two are negotiating the terms of the next gas transit contract. The next round of talks will begin this month, with the participation of EU officials as a party with a vested interest given the volumes of Russian gas the EU receives through Ukraine.

By Irina Slav for Oilprice.com

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