Page 56 - UKRRptMar19

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
While Russian gas transit through Ukraine fell by 7% last year, it spiked up 26% year-on-year in January , to 7.6bn cubic meters. Today, about one third of Russia’s gas exports to Europe cross Ukraine. Russian officials say they will not need Ukraine’s gas pipelines in the 2020s. But recent years show they needed Ukraine as a back up when the Nord Stream pipeline had problems. Russia’s 10-year gas transit contract with Ukraine expires at the end of this year. Russian officials say they will renegotiate seriously only after they know who will be Ukraine’s next president.
Ukraine cut its gas imports by one quarter in 2018 , Naftogaz reports. Imports fell from 14.1bn cubic meters in 2017 to 10.6bcm. Domestic production – overwhelmingly in the hands of state-owned Naftogaz – increased last year by only 2.5%, to 21bcm. At the same time, Ukraine’s GDP grew last year by an estimated 3.4%. In this context, the most likely causes for the import drop were increased energy efficiency and shifts to other energy sources.
In a step toward closer integration with the EU gas market, a test export of 5,000 cubic meters of Ukrainian gas has been made to Slovakia , reports the Kyiv Post. In the 1970s, Soviet Ukraine was the largest gas producing region of the Soviet Union. Although the country now imports about one third of its gas needs, new production sharing agreements are designed to jump start stagnant production, returning Ukraine to gas self sufficiency in the 2020s.
In a move toward becoming a gas trading hub in the 2020s, tariffs on entry into Ukraine’s gas transportation system were halved on Jan. 1, to $6.28 per thousand cubic meters per day. Western Ukraine has the largest underground gas storage caverns in Eastern Europe.
Washington sees Poland as a future hub for re-export of American liquefied natural gas to Ukraine and Eastern Europe , Georgette Mosbacher, US Ambassador to Poland, told a conference in Warsaw on LNG and the countries of the EU’s Eastern Partnership. She said next year the US will export 120bn cubic meters a year, about 30% of world LNG. Poland is expanding its three-year-old LNG terminal at S´winoujs´cie, on the German-Polish border. In four years, Poland plans to stop importing gas from Russia. Referring to Poland’s plan to “become a regional gas hub,” Mosbacher said: “I support this fantastic initiative of Poland and Ukraine.”
9.1.3 Transport sector news
● Planes
Wizz Air was the fastest growing airline in Ukraine last year, recording a 73% increase in flights, to 15,251, according to UkSATSE, Ukraine’s air traffic control agency. For the other top five: UIA increased its flights by 8% to
56 UKRAINE Country Report March 2019 www.intellinews.com