Energy Perspectives for Europe: Ukrainian potential

Sooner or later – the first is more probable – energy perspective for Europe will bring together the regions of Black Sea, Caspian Sea, and Baltic Sea in an attempt for closer cooperation. It is essential to face the main energy security challenges at earliest convenience as it is being done by the UN European Commission for Europe in Geneva, the EU Commission in Brussels, National Governments of the European Union of 27 and so on. Europe, with its unveiled hydrocarbon energy sources, keeps being highly sensitive to resource competitions that have emerged since the collapse of the USSR in 1991 and requires stable energy supplying. This is the first, let it be called “European” part of the Euro-Asian “energy bridge”, searching for its connection with some East-European and Asian counterparts and “go-between” section – transporting countries – in the context of the future Common European Energy Policy.
The same work towards Europe is being done by the Energy Summits* –the summits on energy security in the regions of the Caspian Sea, the Black Sea and the Baltic Sea. The IV Baku Energy Summit will take place on 14 November 2008 in Baku, Azerbaijan, and is to be attended by the Presidents of Georgia, Estonia, Lithuania, Romania, Turkey, Poland and Ukraine.
The President of Ukraine Victor Youshchenko has already confirmed his participation in the IV Baku Energy Summit. Earlier the President Yushchenko said at the III Kyiv Energy Summit press-conference that the next Baku Summit was planned to focus on the report of the Inter-State working group which has been established in May 2008 in Kiev. The Group was encouraged to make recommendations on preparation and further implementation of mutually beneficial mechanisms and principles of the “Caspian-Black-Baltic Seas” energy transit zone in accordance with the national legislations and legislation of the European Union, creating the missing “stable and precisely guided counterpart” for the European energy bridge.
Looking forward to the implementation of the project of the Odessa-Brody-Gdansk pipeline carrying hydrocarbons through Ukraine to Europe of 27 Member-States there is a good occasion to give a glance at Ukrainian potential for the European energy bridge and its energy diversification. Geographical situation of Ukraine enables diversified oil supply by independent oil pipelines from Azerbaijan, Kazakhstan, Turkmenistan, Far and Middle East countries, making Ukraine an important and growing transporter for oil-extracting Caspian region, delivering oil to the most exigent markets in Europe. Ukrainian natural gas pipeline system (NGPS) is 37 600 km length and consists of 73 compressor stations (110 compressor workshops), 1670 gas distributing terminals, 13 underground gas repositories (UGR) containing over 32 mlrd. m3 of active natural gas and relevant infrastructure units. Ukrainian NGPS is capable to hold up to 290 mlrd. m3 and transfer 175 mlrd. m3 of natural gas, including 140 mlrd. m3 for the needs of the countries of Western and Central Europe. Ukraine keeps updating its NGPS following the programme of overall reconstruction of compressor stations by 2015. 2030 is the deadline for modernisation and technical re-equipment of Ukrainian NGPS using the most sophisticated and effective gas transporting technologies.
It is already planned to increase Ukrainian NGPS transit capacity by 30-35 mlrd. m3 per year upgrading Torzhok-Dolyna pipeline and due to construction of the second brunch of the Ananiv-Ismail pipeline toward the town of Uzhgorod. Moreover, reconstruction of the Solokhivsky, Proletarsky and Bilche-Volynsky-Ugersky UGR can raise their effectiveness up to 6 milliards of cubic metres per year.
During 40 years Ukrainian pipelines ensure the effective transport of oil to Ukrainian refineries and transit deliveries to the Eastern and Central Europe. Oil pipeline system (OPS) of Ukraine, being exploited by the OJSC « Ukrtransnafta », consists of 18 backbone oil pipelines of 4569,4 km length. Yearly carrying capacity is 114 mln t on entry and 56,3 mln t on exit. Tank farm capacity is about 1 million cubic metres. It is comprised of the two main oil pipeline systems in Ukraine: Druzhba Main Oil Pipeline and Prydniprovski Main Oil Pipeline. Ukrtransnafta also manages the new Odesa-Brody Pipeline, which was recently completed. “Ukrtransnafta” as state owned company has three primary parts to its mission: to promote Ukrainian oil pipeline integration with European oil transport systems, to create attractive business conditions for foreign partners to invest in oil pipeline development and to implement a new business approach to make the Odesa-Brody pipeline more commercially attractive.
It is essential to make Ukrainian OPS to meet international technological and equipment standards: energy conserving electroengins and frequency regulating electric driving gears, high performance pumps, modern vessel equipment, counter-turbulent dopant, effective anticorrosion coating and electrochemical pipeline protection and cleaning, diagnostics, repairing, information and analytical systems for optimisation of OPS operation modes.
What the European consumer should obviously know is some basic planning figures. Ukrainian OPS is getting more engaged in oil transportation: until the year 2010 the OPS capacity will be 65 millions tonnes and up to 2015 – 70 mln t per year with tendency to fixed capacity or gradual reduction. Increasing transportation capacity of Ukrainian OPS will be ensured by series of projects: integration of the pipelines Druzhba and Adria (meant to increase Druzhba capacity up to 5-15 mln t), construction of the pipeline Brody (Ukraine) Plotsk (Poland) and development of the Euro-Asian Oil Transportation Corridor, transporting oil from the Caspian region (Azerbaijan, Kazakhstan) and the Persian Golf countries (Iran, Iraq and other countries) getting charged with 10 mln t until 2010 and with 20 mln t until the year 2015. Passing the year 2010 Ukraine risks to face gradual capacity slackness resulting from decreasing of Russian oil transportation therefore the project of the Euro-Asian Oil Transportation Corridor is the main and strategic vector of further development of transitional potential of Ukraine. During the years to come Ukraine can count on increased capacity of the Odesa-Brody pipeline of 40 mln t per year. Switching to avers-mode of the Odesa-Brody pipeline enables oil supplying to Ukraine from other countries of the Caspian region and from Iraq, Iran and Northern Africa.
Possessing of described natural gas and oil pipeline system Ukraine can obviously be deeper involved in processes of hydrocarbon energy supply diversification in Europe and play an important role in the Common European Energy Policy.
* The first Summit was held in Krakow City of Poland in May, 2007, second one in Vilnius in October, 2007 and the last summit was held in Kyiv, Ukraine on May 23, 2008. Presidents of about 10 countries participated in the last one.