Kyiv, 13 November 2013Kyiv, 13 November 2013

MYKHAILO GONCHARMYKHAILO GONCHARNOMOS / Strategy XXINOMOS / Strategy XXI

UkraineUkraine

Gazprom achievements: crash of Nabucco + resistance to TransCaspian Pipeline + acceleration of South Stream (first line)

NORD STREAM

SOUTH STREAM

YAMAL-EUROPE

MAINSTREAM.UA

TANAP

Hub Baumgarten

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In 2012, USA overcame the Russian Federation in the level of gas production. Norway nearly came up to the RF in the gas export volumes to the EU.

Scolkovo Energy Centre, 26.04.2012: «…As a result of the abrupt increase in the shale gas production (seventeen times much in comparison with 2000 year) the USA not only became independent from gas import, but became ready in the years coming to begin LNG export to Europe and the Asian-Pacific region. It means that in the long run Russia will meat new rival in its export markets.Minister of Energy of the RF A.Novak, 04.02.2013:«…Market withdrawal of the biggest hydrocarbon commodity importer – USA significantly changes the map of traditional export routes…As far as the tanker fleet and LNG regasification facilities beсome larger, the gas market will transform gradually in the consolidated global market…In the oil market as well as in the natural gas market we expect the substantial increase of the competition…»IA «Regnum», 10.11.2013: “… Adriatic Gas Corridor pushed forward by Brussels is the next Anti-Russian project ”

System challenges for Russian gasocracy

American LNG-challenge for Russia

• SKOLKOVO Energy Centre: “…as a result of the sharp increase in shale gas

production (seventeen times compared to 2000) the USA have not only achieved independence from gas imports, but also will be ready in next five years to start exporting LNG to Europe and Asian- Pacific region. This means that in the long term, Russia will face the emergence on its gas export markets of a new competitor. Application of new technologies for extracting oil from tar sands in Canada has led to a significant increase in reserves and production in this country, and this trend will continue in the future.” (April 26, 2012)

Azeri deception for Central and Eastern Europe: TAP instead of Nabucco West + AGRI as an LNG mirage for Romania and Ukraine +absence of the real support to White Stream

E&P projects for natural gas in Ukraine and Poland (onshore, offshore and unconventional gas)

E&P projects for natural gas in Ukraine and Poland (onshore, offshore and unconventional gas)

PLUA

Ukraine and Poland are the future Methane Belt of Europe

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Geomethane Axis of EuropeTable 1. Matrix of scenarios on the total gas production volumes from

conventional and unconventional sources in Poland and Ukraine by 2030

Poland* Ukraine

29 (Wood Mackenzie)

39 (EUCERS)

57 (ARI)

82 (US ЕІА)

30(pessimistic scenario )

30+29=59 30+39=69 30+57=87 30+82=112

44(basic scenario)

44+29=73 44+39=83 44+57=101 44+82=126

47(optimistic scenario)

47+29=76 47+39=86 47+57=104 47+82=129

73(ІHS CERA forecast)

73+29=102 73+39=112 73+57=130 73+82=155

Each country to some extent has the possibility to minimize import and to obtain the self-sufficient status or to become a gas exporter.

Gas Corridors North – South:

1.Eastern or Visegrad Corridor(to connect “Polskie LNG” on the Baltic Sea and “LNG Adria” on the Adriatic Sea)

1.Western (to connectRussian streams via OPAL – Gazelle – TGL)

North – South Gas Corridor:

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Consequence of Russian bypass activity:Consequence of Russian bypass activity:Future gas supplies to the V4, Lithuania Future gas supplies to the V4, Lithuania and and Ukraine are under the risk of and and Ukraine are under the risk of interruptions.interruptions.

Possible interruptions

According to order dated November 2012 Kaliningrad interconnector has to be built

Yamal Europe - IIAccording to order dated April 2013

Scheme of the Energy Transparency Regime for Gas (ETR-G) based on the physical on-line data interchange as an Early Warning Mechanism

on-line verification

Producer (RU)

TransmittersEaP countries (UA, BY, MD)

Consumer (EU)

1. WORKING PRESSURE2. OUTCOMING VOLUMES (DAYLY)3. INCOMING VOLUMES (DAYLY)

Improvement of free access to the pipelines and UGS capacities.

Transition to the tariff system “Entry-Exit”.

Transition to the pipelines capacities auctions.

Transition to the energy indexes of natural gas accounting.

Modernization of Ukrainian GTS

Development of the Central European Gas Hub in the partnership with the European companies

Directions of gas market adaptation to the EU requirements on the basis of the EU Gas Directives and the membership in the Energy Community

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Quo vadis?

NOMOSCentre for Global Studies “Strategy XXI”

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