Poland and Ukraine Jump Start Close Fuel Ties

Natural gas trade between Poland and Ukraine is expected to rise in the near future after the former offered to supply Ukraine consumers with essential energy commodities.

The deal was made after an agreement with Eru Traders, a private gas trader in Ukraine.

Since the announcement, Poland’s national energy company, PGNIG, has declined to provide details on the volume of goods and the terms of the fuel supply deal, but according to Reuters, the Ukrainian industry consumes about 11 billion m3/yr of gas.

Both Poland and Ukraine are planning on increasing the amount of gas that is exchanged between their systems. Ultimately, the goal is to connect the LNG terminal on Poland’s Baltic Sea to both central and eastern European countries (North-South gas corridor).

For now, Poland and Ukraine both depend on Russia for fuel supplies. Ukraine, which was formerly a Soviet Republic, has been trying to sever ties with Russia since the February 2014 revolution that tore the country apart. While nuclear power dominates Ukraine’s energy grid, 95 percent of the fuel used for the nuclear plants currently comes from Russia.

Energy minister Igar Nasalyk has announced plans to break this dependence.

Ukraine’s relationship with Russia has been falling apart further in recent days, and yesterday, Ukraine announced further plans for its energy independence with an agreement with Westinghouse Electric Sweden, which will construct a nuclear fuel production facility in Ukraine.

By Zainab Calcuttawala for Oilprice.com

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