Why Russia needs Ukraine

Gas pipeline

Ukraine is critically dependent on Russia for its gas supplied but Russia is also dependent on Ukraine for the majority of its exports, as gas flows though pipelines across Ukraine into Western Europe via Poland, and via Romania to Bulgaria and Turkey [1]. Here are some figures:

• Russia is the world's largest gas exporter, with net exports of 185 bcm (billion cubic meters) in 2012 [1]
• In 2013, Russia exported more gas to Europe than ever before: 161 bcm [3]
• A quarter of all Europe's gas needs come from Russia [3]
• Pipelines through Ukraine amount to 56% of Russian export pipeline capacity [4]

So, Russia needs a stable Ukraine to protect its pipelines, and Europe wants stability in Ukraine and Russia to protect its gas imports.

The UK gets most of its gas imports from Norway. However, if Russia were to cut off gas supplies to other parts of  Europe the whole continent is so tightly connected that prices would go up everywhere.

Fortunately, this winter has been mild and gas stocks across Europe are relatively high for the time of year. This means we have some time for the current crisis in Ukraine to be sorted out before our energy security situation becomes acute [5].

[1] Digest of UK Energy Statistics (www.gov.uk)
[2] 2013 Key world energy statistics (IEA 2014)
[3] Gazprom’s European Gas Exports Rise to Record as Price Reduced (Dec 30th 2013)
[4] Russian Strategy on Infrastructure and Gas Flows to Europe (Polinares 2012 (EU Policy on Natural Resources))
[5] Gas Stores Seen Cushioning EU From Ukraine Supply Risk (Bloomberg news Feb 24 2014)