OREANDA-NEWS. Transit through Ukraine will be cheaper than Russian state-controlled Gazprom's planned Nord Stream 2 natural gas pipeline after 2020, state-owned Naftogaz has said.

Gazprom plans to shut lines and compressor stations on its central corridor to reduce delivery capacity into Ukraine to 10bn-15bn m?/yr. This would save the firm $1.6bn by the end of this decade, chief executive Alexei Miller said yesterday.

But Naftogaz "estimates" that delivering Russian gas through Ukraine will be "several times more cost-effective in 2020 than via Nord Stream 2", it said.

Costs would be a quarter of those of Nord Stream 2 if 110bn m?/yr of capacity is booked through Ukraine, and a third of the cost if 70bn m?/yr is booked, Naftogaz said.

Gazprom previously said it expected Ukrainian transit to be more expensive. The transit fee for Nord Stream 2 will be $2.10/'000m? per 100km, while the Ukrainian charge is $2.50/'000m? over the same distance, Gazprom said.

And the Russian firm forecasts the latter fee to rise to $4.60/'000m? per 100km, because "Ukraine needs to modernise" its transport network. Ukrainian transit fees will fall in 2020, Naftogaz said.

The Ukrainian regulator has had to hike tariffs to accelerate the amortisation of the network in 2016-19, as "Russian officials have repeatedly announced their intention to discontinue gas transit through Ukraine from 2020", Naftogaz said.