Pipeline problems
That said, the storage plan faces a raft of logistical problems — and may not be realistic.
Aura Sabadus, a senior gas market expert at the ICIS consultancy, said the proposal is a “good idea” since it would also allow Ukraine to earn revenues from storing gas. But the capacity of the so-called Trans-Balkan pipeline that travels through Turkey, Bulgaria, Romania and Ukraine can currently only carry around 2.5 bcm of gas, she said — far short of the proposed 10 bcm.
That’s because Romania and Bulgaria have not made enough gas trading capacity available, Sabadus said. The fact that Romania’s state-owned gas firm Transgaz charges “extortionate transmission fees” also sharply reduces the incentive to buy gas along that route, she added.
Meanwhile, Slovakia, Hungary and other countries neighboring Ukraine have sufficient gas storage capacity to supply their own markets already, said Sergiy Makogon, the former head of Ukraine’s state-owned gas grid operator GTSOU.
That raises questions about what extra benefits Kyiv’s storage facilities could bring to the bloc, he argued. “For me, this idea does not make any commercial sense,” Makogon said.
Buyers and sellers, too, are skeptical about the business case.
