On the world stage, the words “energy security” provoke debate about diversifying supplies and reducing dependence on bad players, but for Sergei Makogon their meaning is more literal: how to preserve the network of nearly 40,000 kilometers of natural gas pipelines cross his country operates in the midst of war.
The day the CBC spoke to him last week, the chief executive of Ukraine’s gas transmission operator was busy diverting a pipeline near the northern city of Kharkiv that had just been hit by a rocket, reassuring several workers at a compressor station. seized by Moscow-backed separatist fighters in eastern Ukraine.
He was also trying to figure out a way to deliver gas to Mariupol, whose residents were cut off by heat and electricity after air strikes damaged a pipeline more than a month ago.
“This is a humanitarian catastrophe at the moment in Mariupol,” Makogon said by telephone from an undiscovered location in western Ukraine, where he and his staff found refuge soon after the Russian invasion began.
“We know very well where the gas pipeline is damaged, but no one can guarantee the safety of our staff. This city is completely blocked by Russian troops … So, unfortunately, we cannot restore gas supplies.”
A resident of Mariupol is preparing food in front of a residential building damaged by air strikes on April 3. The southern port city has been without heat and electricity for more than a month. (Stringer / Reuters)
Fighting in the east threatens transit
Makogon’s team is responsible for the high-pressure pipelines that transport 40 billion cubic meters of natural gas a year to Europe.
The network is a link in a complex system of interdependence that keeps the lights in Europe and provides substantial revenue for Russia. Experts say it will not be easy to detect, but that it faces its biggest threat since the West began importing large quantities of gas from the Soviet Union in the late 1980s.
“This system was created with great pride on both sides,” said Margarita Balmaceda, a professor of diplomacy and international relations at Seton Hall University in New Jersey and author of several books on Russia’s influence in the energy sector.
“Engineers, designers, managers were really excited to create a system … that finally managed to withstand all the political tensions over time that could overcome the Iron Curtain.
Russia’s invasion of Ukraine threatens to reverse that precedent, she said, as Europe seeks to reduce its dependence on Russian gas and Russia threatens to punish countries that oppose the invasion, using its gas deals to support the ruble.
Map showing some of the main pipelines between Russia and Europe. (CBC)
While Europe’s focus is on how the current crisis is affecting its supplies, international pipelines passing through Ukraine are also affecting how gas moves through the local grid, which Ukrainians rely on for heat and electricity.
Since the Russian invasion began on February 25, shelling has begun damaged several pipelines, compressor stations and distribution points on this interconnected system, Makogon said.
“Most of the damage is due to low-pressure pipelines due to very heavy fighting in or near cities.”
A man walks past a burning gas pipeline that was hit during a shelling by Russian positions in northern Kharkiv on March 31st. Several pipelines, compressor stations and distribution points have been damaged since Russia invaded Ukraine on February 24 (Thomas Peter / Reuters).
So far, apart from Mariupol, operators have found alternative ways to deliver gas to the affected areas, he said, but he is increasingly worried about the Novopskov compressor station. It is located on the route of the Soyuz gas pipeline, which carries gas to Europe through the breakaway region of Luhansk in eastern Ukraine, where fighting has escalated in recent days.
Makogon warn last Friday that gas supplies could be jeopardized if fighters who have occupied the station since the invasion began interfere with its work.
“If we can’t control the station remotely, we will have to stop transit for this particular connection point,” he told the CBC. “We’re really worried about … this whole area to the east.”
Russia’s state-owned Gazprom said in an email to the CBC that it provides gas for transit through Ukraine as usual and “in line with the demands of European consumers.”
Sergei Makogon manages a system of high-pressure pipelines that transport 40 billion cubic meters of natural gas a year to Europe via Ukraine. (Submitted by Sergey Makogon)
“Energy Air Defense”
Ukraine is one of the four main pipeline corridors through which Russian gas flows to Northern, Central and Southern Europe, which together supply about 45 percent of gas imported by the EU.
It does not import gas from Russia itself, but receives about $ 100 million a month to ensure it reaches Europe. More importantly, Makogon said, he ensures that Russia can raise approximately $ 900 million a day from gas sales to Europe.
“We call it a kind of our energy air defense,” he said. “We believe that as long as we have transit, the Russians will not intentionally destroy our infrastructure and we will be able to supply gas to the local population.
(CBC)
Ultimately, Ukraine would like to see Europe impose a full embargo on Russian oil and gas, but is aware that a phasing out of the market is more likely, Makogon said.
“We understand that, unfortunately, Europe is too dependent on Russian gas.”
Russia, for its part, is in no hurry to cut off the flow of revenue generated by Europe’s energy needs, Balmaceda said. It did 99 billion euros ($ 136 billion Cdn) last year from oil and gas sales to the EU.
“The reality is that they need these sources of income,” she said.
Balmaceda said Russia had used supply disruptions as a lever only a few times: in 2006 and 2009 in price disputes with Ukraine and last autumn when it cut gas supplies to put pressure on European partners to speed up certification. of Nord The “Stream 2” pipeline to Germany, which has now been shut down due to Russia’s recognition of the breakaway republics in eastern Ukraine.
“They really worked on the idea of being a reliable supplier,” said Balmaceda, who is also a fellow at the Davis Center for Russian and Eurasian Studies at Harvard University and the Harvard Ukrainian Research Institute.
While Gazprom said in an email to the CBC that it “continues to ensure reliable gas exports to consumers,” it also said it would comply with Russian President Vladimir Putin’s order requiring “unfriendly” countries to transfer payments in foreign currency. for Russian gas in ruble accounts.
A Russian builder speaks on a mobile phone during a ceremony marking the start of construction of the Nord Stream 1 gas pipeline in Portovaya Bay northwest of St. Petersburg, Russia, in April 2010. The pipeline carries natural gas to Germany, which receives more than 60 one hundred of its gas from Russia. (Dmitry Lovetsky / Associated Press)
Opportunities for eastward expansion are limited
It is unclear whether Russia will stop supplying non-compliant supplies, but Carlos Torres Diaz, an analyst at Rystad Energy, an Oslo-based energy market research company, says diverting gas to other markets will not be something that Russia can do it quickly and easily.
Russia has been expanding gas exports to China in recent years, but its current pipeline to the region does not connect to gas fields in Western Siberia and Yamal, where European gas comes from, so redirecting that supply will require building new connections, expansion projects. who are in danger because of the sanctions imposed on Russia for its invasion of Ukraine.
“A lot of this infrastructure has been developed with Western companies like Exxon, for example, but they are withdrawing,” said Torres Diaz.
Europe, for its part, took a step towards weaning itself off Russian energy last week ban on imports of Russian coal starting in August, but doing the same for natural gas would be much harder, Torres Diaz said.
A billboard near Svobodny, in the Amur region of eastern Siberia, advertises Gazprom’s Power of Siberia pipeline, part of Russia’s plan to expand natural gas exports to China. (Maxim Shemetov / Reuters)
The EU is looking at LNG, renewables
Diaz and other analysts say European countries will have to fight to build natural gas storage facilities for next winter and achieve the European Commission’s (EC) ambitious goal of reducing Russian gas imports by two-thirds. by the end of the year and to phase out all fossil fuel imports from Russia by 2030.
Finding a way to replace 155 billion cubic meters of natural gas a year that Europe imports from Russia will mean increasing sources such as liquefied natural gas or LNG, which is transported by ship and regasified on the other side.
Efforts to replace Russia’s pipeline gas with LNG are limited by existing supplies, however, many of which are tied to long-term contracts. New projects are not expected to be online until 2024 or 2025.
“The main source of increased supply will be the United States, because it is one of the closest markets, and also because the United States has the greatest flexibility in the supply of liquefied natural gas, given that not so much of the volume is sold on long-term contracts, “said Torres Diaz. .
Snow-covered transmission lines are visible at the Dominion Cove Point liquefied natural gas terminal in Lusby, Maryland. The United States has agreed to increase its LNG supplies to Europe to help replace Russian gas. (Gary Cameron / Reuters)
Europe is competing with Asia for liquefied natural gas, which is available on the so-called spot market, and while recent record high prices make redirecting it to Europe an attractive option, it may not be next winter, said Paris-based Anne-Sophie Corbo. researcher at the Center for Global Energy Policy at …
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