Page 57 - UKRRptJun19

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Ukraine’s national gas company Naftogaz Ukrainy has caved into to pressure from Ukrainian Prime Minister Volodymyr Groysman and says it will reduce gas prices for the population from May 1, 2019 the company said on May 1. "Under the instruction of the Cabinet of Ministers of Ukraine, Naftogaz Ukrainy, together with the government representatives, has developed a new mechanism for determining the regulated price, which allows not only to avoid increasing the cost of gas for the population and thermal generation plants from May 1, 2019, but also to reduce it to UAH 8,247 per 1,000 cubic meters (the final retail price)," the statement reads as cited by Interfax Ukraine. The decision was made at a meeting between Groysman and Naftogaz CEO Andriy Kobolev. If the market price of gas for industrial consumers is lower than that established by the resolution of the Cabinet of Ministers of Ukraine dated October 19, 2018, the price for the population will fall in accordance with this. If the market price of gas for industry exceeds the government-determined level, the price for the population will remain at this level.
Preparing for a possible cutoff of Russian gas through Ukraine next January, Ukrtransgas has increased Ukraine’s import capacity of gas from Hungary by 14%. Over the last three years, gas imports from Hungary tripled, hitting 3.4bn cubic meters last year. So far this year, almost 1bn cubic meters have been imported, 66% more than during the same period last year.
Since the end of the heating season, on April 5, Ukrtransgas has pumped gas at a high rate into the nation’s 12 underground reservoirs. Today these reservoirs hold 11bn cubic meters, 20% more than one year ago.
With European gas prices falling, Naftogaz is cutting gas prices by 8% for households and industrial users, to about $220 for 1,000 cubic meters. Since September, the EU natural gas import price has almost dropped by half. This came too late for President Poroshenko who took a highly unpopular move in November to raise gas prices 23.5% toward European levels.
Since the end of the heating season on April 4, Ukraine has increased its gas reserves by 20% to 10.5bn cubic meters, reports Ukrtransgas. With no guantees that Russian gas will be available after Jan. 1, the Naftogas goal is to start the late fall heating season with 20bcm of gas in reservoirs.
Fearing a Russian cutoff of gas supplies through Ukraine next winter, Hungary is filling its gas storage reservoirs to 100% of their 6.3bcm capacity, MFGT, Hungary’s state-owned storage company, said Wednesday at the Flame gas conference in Amsterdam. "If there is no flow from Ukraine from January 1, 2020, there is the real possibility, the real threat, that we might face problems," said Akos Kriston, MFGT’s deputy CEO. Asked if traders consider storing gas in Ukraine, he replied traders fear "they might not get their gas back." Last year, Gazprom supplied 7.6bcm of Russian gas to Hungary, a 9.3% increase over 2017, reports S&P Global Platts.
57 UKRAINE Country Report June 2019 www.intellinews.com