August 30, 2019 / 7:24 PM / 2 months ago

Ukraine looks at U.S. LNG as part of diversification plan

WARSAW, Aug 30 (Reuters) - Ukraine is interested in buying U.S. liquefied natural gas (LNG) via infrastructure in Poland as it seeks to reduce reliance on Russian gas, a top Ukrainian security official said on Friday.

Representatives of the United States, Poland and Ukraine are expected to sign an agreement on Saturday in Warsaw over enhancing the security of gas supplies in the region, which still relies mostly on Russian supplies.

“We are interested in diversification of gas supply and obviously access to LNG is one of the ways to diversify gas supply,” Oleksandr Danylyuk, secretary of Ukraine’s naitonal defence and security council told Reuters.

“There is an existing LNG facility in Poland which is being expanded now and we are interested in being able to use it. It is in the interests of Poland, it is in the interests of Ukraine and it is in the interests of the Unites States as a supplier. I think it is what we call win, win, win,” he added.

Poland, which still buys most of the gas it consumes from Russia, has significantly increased LNG imports, including from the United States, via the Baltic Sea terminal at Swinoujscie, to reduce reliance on Moscow and to become a player on international LNG markets.

Earlier this week, Poland’s state-run gas firm PGNiG said that it bought a cargo of liquefied natural gas from the United States and sold it to Ukraine.

“At the moment the existing infrastructure does not allow us to get significant volumes of gas. Obviously we are interested in serious diversification, we are interested in getting more. So it could be 5, 6 billion cubic metres (bcm), it depends. That is a significant volume,” Danylyuk said.

Ukraine consumed 32.3 bcm of gas in 2018, 10.6 bcm of which was imported. The country used to meet its gas needs with imports from Russia but has not bought Russian gas directly since November 2015 after Kiev’s relations with Moscow soured over Russia’s annexation of Crimea.

In winter Ukraine traditionally uses some of the gas pumped by Russia to European consumers for its own needs and compensates for this by deliveries from Ukrainian gas storage located in the west of the country.

But the Russia-Ukraine gas transit agreement is due to expire in January and Ukrainian energy authorities are worried that Moscow could stop gas supplies through Ukraine. (Reporting by Alan Charlish, Writing by Agnieszka Barteczko; editing by Emelia Sithole-Matarise)

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