South Stream pipeline implies a significant impact on transit flows via Ukraine

Russian pipeline plans will impact on Ukraine gas transit

Russia's planned South Stream pipeline could impact on transit flows via Ukraine, according to a company presentation.

The pipeline will be two-thirds filled by gas for existing European demand, implying a significant impact on transit flows via Ukraine, the presentation slides revealed.

Russia plans a 2015 launch for the giant $21.5 billion pipeline, which will transport up to 63 billion cubic metres (bcm) of gas to central and southern Europe.

South Stream denies it will entirely replace flows via Ukraine.

"Even when South Stream and Nord Stream projects are put into operation, share of Ukraine in the Russian gas transit capacities to the EU will be tangible," South Stream Chief Executive Marcel Kramer said in a presentation to EU officials this week.

The executive had sought to allay European fears of increasing dependence on Russian gas by saying only one-third of the pipeline's capacity was for new volumes of Russian gas.

However he prompted questions about which pipelines the other 42 bcm would be diverted from - among them Ukraine's transit system, which last year carried 95 bcm to Europe.

"Up to two thirds of South Stream gas pipeline full capacity - serving existing EU gas demands," the presentation said.

About 20 bcm of gas will be diverted from Ukrainian transit pipelines to the Nord Stream pipeline across the Baltic Sea to Europe, the chief executive of Russian gas monopoly Gazprom Alexei Miller said this week.

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