Page 53 - bne IntelliNews Country Report: Ukraine Dec17

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Natural gas consumption in Ukraine fell 16% y/y to 2.4 bcm in October (+61% m/m). Domestic extraction rose 5% y/y to 1.8 bcm over the period, while imports slid 31% y/y to 1.1 bcm, with 0.7 bcm pumped into underground storage (+16% y/y). Monthly gas transit was down 15% y/y (-16% m/m) to 7.0 bcm. In 10M17, domestic consumption was flat y/y at 24.1 bcm, satisfied by 17.3 bcm of domestic extraction (+4% y/y) and 11.8 bcm of imports (+50%), with the surplus (10.3 bcm) pumped into underground storage (up 10x y/y). Transit to the EU/CIS increased by 18% to 77.4 bcm.
Industrial consumption in October was little-changed y/y at around 1 bcm, while households and heating utilities cut gas use by 26% and 36% y/y to 0.8 bcm and 0.3 bcm, respectively, due to a later start to the heating season. The largest industrial consumers were steelmakers (22% of total), energy companies (19%), sugar refineries (13%), and chemical producers (11%).
In 10M17, domestic gas demand was flat y/y , with lower consumption by households and heating companies (-4% and -9%, respectively) offset by a 10% increase in industrial gas use (to 8.3 bcm or 35% of total consumption).
End-October domestic gas stocks were 17% higher y/y at 16.9 bcm , on par with 2013 and 2015 levels, boding well for a smooth transition through the winter season.
Naftogaz Ukrainy subsidiary Ukrgazvydobuvannya (UGV) boosted September gas extraction by 7% y/y to 264 kboepd , benefiting from an earlier well stimulation program, while its oil and gas condensate output dropped by 3% y/y to 8.8 kboepd. In 9M17, UGV increased gas production by 4% y/y to 261.3 kboepd, with oil and gas condensate output down 4% to 9.4 kboepd. Overall, the company increased 9M17 output by 4% y/y to 270.7 kboepd.
JKX further slashed its Ukrainian output due to a failed fracturing program and scheduled shutdown of a gas processing plant . Its September production fell 8% m/m and 14% y/y to 3.0 kboepd, with 9M17 output down 11% y/y to 3.6 kboepd. The company is revising its development plans in Ukraine and plans to restart drilling in 2018. In Russia, JKX fields produced 5.5 kboepd in September (-4% y/y), with 9M17 production down 20% y/y.
53 UKRAINE Country Report December 2017 www.intellinews.com