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. Last Updated: 07/27/2016

Ukraine Uses More Gas Than Agreed

Ukraine has been illegally siphoning off large amounts of Russian gas being shipped to third countries, Gazprom officials said.

Gazprom pays Ukraine for the transshipment of large amounts of gas through Ukraine by allowing it to take an agreed amount of gas from the transhipment. However, Ukraine has breached that agreement, officials said this week.

Announcing its intention to diversify its export routes so it can reduce the proportion of gas it pumps through Ukraine from almost 100 percent to as little as 35 percent of total exports, the gas company said Ukraine had taken almost double the agreed volume in November.

Ukraine burned 8.5 billion cubic meters of Gazprom gas compared with the contracted 4.86 bcm last month, Gazprom's deputy chief executive Yury Komarov said Tuesday at a news conference. In the first five days of December, Ukraine took 1.4 bcm of Russian gas instead of the reserved 785 million cubic meters for its consumption, he added.

Because of its dependence on Ukraine for exports, Gazprom cannot cut off Ukraine for taking the gas without permission or for its massive accumulated unpaid gas bills. But Ukraine's unauthorized consumption from the pipeline creates problems for other Gazprom clients, especially Turkey, Komarov said.

Gazprom agreed to supply Ukraine with 30 bcm of gas for its 125 bcm transit to Europe in 1999. Next year the Russian gas company plans to deliver 31.5 bcm of gas to the neighboring country for gas transit, according to Gazprom. The gas firm also agreed to supply a further 25 bcm of gas for retail in Ukraine in 1999.

The company intends to export gas to Turkey using the planned Blue Stream pipeline under the Black Sea, and to Germany through a Yamal-Europe pipeline and through a planned line under the Baltic Sea. These routes can carry about 90 bcm of gas a year, Komarov said.

The first Yamal-Europe line has been shipping 23 mcm a day since November. The pipeline will ship 14 bcm next year and achieve 20 bcm annual capacity in 2001. Gazprom plans to transship 32 bcm through the line in 2002, of which about 3 bcm will go to Poland with the rest delivered to the German border for sales to Italy, Hungary, Germany and 4 bcm to Dutch firm Gasunie.

Gazprom plans to construct a second Yamal-Europe pipeline to replace the obsolete infrastructure in Ukraine, Komarov said. "We do not want to participate in increasing Ukraine's capacity as we have no guarantee of a return on our investments," he said.