Explosion tears through Ukrainian gas pipeline

By bne IntelliNews January 11, 2021

An explosion has ripped through a major pipeline in Ukraine’s central Poltava region that pumps Russian gas to Europe, authorities have said. Russian transit volumes are unaffected, however, following a steep cut in flows by Russia’s state-owned Gazprom earlier this month.

The incident occurred at the Urengoy-Pomary-Uzhgorod pipeline near the town of Lubny at 15:50 on January 9, knocking out a 30-metre section of pipe, Ukraine’s transmission system operator GTSOU said in a statement. An investigation is ongoing, although authorities have identified a leak as a preliminary cause, dismissing suggestions of external interference.

No one was injured by the blast, although gas supplies were disrupted to more than 3,000 households and industrial consumers in Lubny and several other settlements in the Poltava region. GTSOU said supplies had been restored at 10:40 on January 10 by delivering gas using alternative routes.

A team of 30 workers are on site to replace the damaged pipe section, the operator said, without specifying when re-commissioning was likely.

The Urengoy-Pomary-Uzhgorod pipeline was built in the late 1980s and transports gas from key fields in Western Siberia across Ukraine to central Europe. It is also used by local producers in the Poltava region.

This marks the second pipeline explosion in Ukraine in less than four months. In September last year, part of the Kyiv-Western Ukraine-1 pipeline exploded in the Kyiv region. That pipeline pumps gas from eastern Ukrainian fields to storage facilities near the country’s border with the EU. But supplies were subsequently rerouted and there were no disruptions.

The latest blast comes after Gazprom cut Ukrainian gas transits by around a third in early January to 130mn cubic metres per day, according to a statement made by GTSOU’s CEO, Sergiy Makogon, on social media on January 6. The reduction was made despite a recovery in European gas demand in recent months.

Gazprom sent almost a third less gas to its European customers last year via Ukraine, with shipments amounting to 55.8bn cubic metres, or around 153 mcm per day. This is a 38% reduction from volumes in 2019.

The decline was hardly a surprise. Gazprom reached a new transit deal with Ukrainian authorities in late 2019, reducing the minimum amount of gas transit it had to pay for to 65 bcm in 2020. The company’s sales to Europe also slumped last year owing to coronavirus (COVID-19) lockdowns and various other factors. In addition, it diverted some gas to the TurkStream pipeline that runs under the Black Sea to Turkey, which was commissioned at the start of 2020.

Under its contract with Kyiv, Gazprom only has to pay for 40 bcm per year of gas transit through Ukraine between 2021 and 2025. The company had hoped to be pumping significant volumes of gas through the Nord Stream 2 by now, but the pipeline’s launch has been delayed because of US sanctions. S&P Global Platts Analytics now assumes the pipeline, originally due to start up at the start of 2020, will come on stream in the third quarter of this year.

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