Gazprom tells about future

Gazprom Deputy Chairman Alexander Medvedev confirmed that Gazprom will stop gas transit through Ukraine to Europe after 2019. He also confirmed the seriousness of intentions regarding the construction of the Turkish Stream gas pipeline.

He expressed confidence that there will be no risks in the construction of the first line of the Turkish Stream gas pipeline. "There is no risk for the first line," TASS cited Medvedev as saying.

Moreover, Gazprom has already signed gas supply agreements with Turkey's Botas and private importers of natural gas. The intergovernmental agreement between Russia and Turkey on the Turkish Stream construction may be signed before the end of June. Gazprom also held talks on continuing the Turkish Stream with Serbia. And what do you think - we were just drinking plum brandy?" he joked, answering a question about negotiations in Serbia.

Medvedev also confirmed that Gazprom will stop gas transit through Ukraine to Europe after 2019. "After the expiry of the transit contract with Ukraine there will not be any prolongation nor signing of a new contract on any terms," he said. As a result, Europe may face a deficit of gas imports totalling 50 billion cubic meters in 2025. The total deficit will reach 80 billion cubic meters, while the US will only be able to supply 50 billion cubic meters of gas to Europe, Medvedev warned.The Deputy Director of the Institute of Energy Strategy, Alexey Belogoriev, said in an interview with Vestnik Kavkaza that the rejection of gas transit through Ukraine is exclusively a political decision, because Gazprom can confidently talk about readiness not to renew the transit contract, "taking appropriate economic risks."Belogoriev noticed that all existing and planned infrastructure resources today are not enough to "turn off the tap to Ukraine" in 2019, not to reducing supply to Europe. According to him, the implementation of the Turkish bypass route will take not so much time, on condition that disagreements with the European Union will be settled.As a result, Alexander Medvedev's speech suggests that Gazprom has really made a bet on Turkish stream, the expert said. "And I believe that the first phase of the pipeline will be built. The transit through Ukraine will likely remain, but instead of 120 billion per year, only about 40-60 billion cubic meters will be pumped. At the same time, Gazprom will be able to use the Turkish Stream as a means of pressure on the EC, as, if it refuses to transfer routes, it should at least urge Ukraine to sign a more lucrative transit contract," Alexei Belogoriev concluded.

The Deputy Director of the Institute of Energy Strategy, Alexey Belogoriev, said in an interview with Vestnik Kavkaza that the rejection of gas transit through Ukraine is exclusively a political decision, because Gazprom can confidently talk about readiness not to renew the transit contract, "taking appropriate economic risks."

Belogoriev noticed that all existing and planned infrastructure resources today are not enough to "turn off the tap to Ukraine" in 2019, not to reducing supply to Europe. According to him, the implementation of the Turkish bypass route will take not so much time, on condition that disagreements with the European Union will be settled.

As a result, Alexander Medvedev's speech suggests that Gazprom has really made a bet on Turkish stream, the expert said. "And I believe that the first phase of the pipeline will be built. The transit through Ukraine will likely remain, but instead of 120 billion per year, only about 40-60 billion cubic meters will be pumped. At the same time, Gazprom will be able to use the Turkish Stream as a means of pressure on the EC, as, if it refuses to transfer routes, it should at least urge Ukraine to sign a more lucrative transit contract," Alexei Belogoriev concluded.