Ukraine says to lose $450 mln revenue/yr after TurkStream launch

KIEV, Jan 9 (PRIME) -- Ukraine expects a U.S. $450 million per year revenue shortfall after Russia has launched the TurkStream gas pipeline, Operator of the Pipeline System of Ukraine CEO Sergei Makogon said at a press conference on Thursday, as reported by channel Nash TV.

“We cannot call this a loss, this is a revenue shortfall. We estimate it at about $450 million per year… we will just fail to earn the money,” Makogon said.

The TurkStream pipeline, launched on Wednesday consists of two branches with a length of over 900 kilometers and a capacity of 15.75 billion cubic meters (bcm) each. One of them carries Russian gas to Turkey, while the other is to transit gas to the European countries through Turkey. Bulgartransgaz plans to build an extension of TurkStream to Europe by the end of 2020.

Makogon said that no company except Gazprom has asked Operator of the Pipeline System of Ukraine to book gas transit capacities. “Only company Naftogaz Ukrainy has officially booked the capacity to fulfill transit obligations to Gazprom. We have no other orders,” he said.

Operator of the Pipeline System of Ukraine hopes that Naftogaz Ukrainy will return to negotiations about Russian gas storage in Ukrainian underground facilities with Gazprom, Makogon said.

“I hope that in the context of this progress in relations with Gazprom, Naftogaz will maybe return to the issue of cooperation in the area of gas storage in our underground facilities. Gazprom certainly has commercial interest in these capacities and therefore we need to attract them,” Makogon said.

The official said that the company has a competitive storage tariff and clear terms. “If we remove all political factors, we can start to work in this area,” Makogon said.

Russia and Ukraine signed a package gas deal on December 30, including a 5-year transit contract. Gazprom guarantees shipment of 65 bcm of gas in 2020 and 40 bcm each following year.

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