Ukraine to halt key Russian gas transit to Europe, use alternative

© Reuters. Gas pipelines are pictured at the Atamanskaya compressor station, facility of Gazprom's Power Of Siberia project outside the far eastern town of Svobodny, in Amur region, Russia November 29, 2019. REUTERS/Maxim Shemetov.

By Susanna Twidale

LONDON (Reuters) -Ukraine said on Tuesday it would suspend the flow of gas through a transit point which it said delivers almost a third of the fuel piped from Russia to Europe through Ukraine, blaming Moscow for the move and saying it would move the flows elsewhere.

GTSOU, which operates Ukraine's gas system, said it would suspend flows via the Sokhranivka route from Wednesday, declaring "force majeure", a clause invoked when a business is hit by something beyond its control.

The company said in a statement that it could not operate at the Novopskov gas compressor station due to "the interference of the occupying forces in technical processes", adding that it could temporarily shift the affected flow elsewhere, to the 'Sudzha' physical interconnection point located in territory controlled by Ukraine.

But Gazprom (MCX:GAZP), which has a monopoly on Russian gas exports by pipeline, said it was "technologically impossible" to shift all volumes to the Sudzha interconnection point, as GTSOU proposed.

Ukraine has remained a major transit route for Russian gas to Europe even after Russia's invasion on Feb. 24.

The Novopskov compressor station in the Luhansk region of eastern Ukraine has been occupied by Russian forces and separatist fighters since soon after Moscow began what it describes as a "special military operation".

It is the first compressor in the Ukraine gas transit system in the Luhansk region, the transit route for around 32.6 million cubic metres of gas a day, or a third of the Russian gas which is piped to Europe through Ukraine, GTSOU said.

GTSOU said that in order to fulfill its "transit obligations to European partners in full" it would "temporarily transfer unavailable capacity" to the Sudzha interconnection point in territory which is controlled by Ukraine.

Gazprom said it had received notification from Ukraine that the country would stop the transit of gas to Europe via the Sokhranivka interconnector from 0700 local time on May 11.

The Russian company added that Ukraine proposed switching all gas transit to Sudzha, adding that it saw no proof of force majeure or obstacles to continuing as before.

Gazprom added that it was meeting all obligations to buyers of gas in Europe.