Page 12 - FSUOGM Week 30

FSUOGM PIPELINES & TRANSPORT FSUOGM

Gazprom sheds stake in Latvian

gas grid operator

RUSSIA RUSSIA’S Gazprom has finally divested its stake The Russian company held its latest auction
in Latvian gas transmission system operator for the asset in December last year, revealing
The move brings (TSO) Conexus Baltic Grid, as required under later that it had collected two bids. Augstspri-
Conexus' unbundling to EU law, Latvia’s economy ministry said on July eguma Tikls, which had a pre-emptive right to
an end. 21. The 34.1% stake has been sold to Latvia’s the stake as an existing shareholder, has not said
state-owned Augstsprieguma Tikls, bringing its how much it paid. But the starting price for offers
total interest in Conexus to 68.5%. in Gazprom’s December contest was €79mn
Conexus was separated from Latvian gas sup- ($87mn).
ply firm Latvijas Gaze (LG) in December 2016, Conexus’ prize asset is the Incukalns under-
under unbundling rules set out in the EU’s Third ground gas storage centre, which has a capacity
Energy Package that prohibit the same com- of 2.3bn cubic metres of gas. There are plans to
panies from controlling both gas supply and expand the facility.
transmission. Gazprom was forced to relinquish its owner-
LG’s shareholders – Gazprom, another Rus- ship of transmission operations in Lithuania and
sian firm called Itera, the EU’s Marguerite fund Estonia back in 2014 and 2015 respectively. This
and Germany’s Uniper Ruhrgas – were given paved the way for the two countries to import
deadlines to sell the stakes in Conexus. Uniper gas from alternative sources. Lithuania launched
Ruhrgas and Itera left the company in 2017 and the Klaipeda LNG import terminal in late 2014,
2018, selling their interests to Augstsprieguma while Estonia commissioned a pipeline to Fin-
Tikls. Marguerite sold its stake in Japanese con- land late last year, although it can only import
glomerate Marubeni earlier this year. Russian gas via this route.
Gazprom has delayed shifting its stake for Gazprom delivered 1.664 bcm of gas to Lat-
years, complaining that it has been unable to via in 2019, according to its own data, up 27.8%
get an attractive enough offer. It was reportedly year on year. It sold 938mn cubic metres of gas to
stripped of its voting rights and managerial con- Lithuania and 269 mcm to Estonia, down 31.7%
trol at Conexus back in early 2018. and 38.2% respectively. ™

Ukraine cuts gas transit by 45% in H1

UKRAINE UKRAINE’S newly formed gas grid operator during its first six months of operation. It began
GTSOU reported on July 24 that it had transited by using virtual reverse or backhauling, when
Russia has to pay 24.9bn cubic metres of gas during the first six gas sold to Ukraine by EU suppliers is simply
for 65 bcm of transit months of the year, marking a 45% decline from deducted from Russian transit volumes before
capacity this year the 2018 level. they leave the country. Previously this gas was
under ship-or-pay After lengthy negotiations, Ukraine reached pumped through Ukraine to its EU neighbours
requirements. a new five-year transit deal with Russia in Hungary, Poland and Slovakia and then pumped
December, under which Gazprom has to pay to back, driving up costs.
ship at least 65 bcm of gas this year, and then Ukraine took 7 bcm of gas from EU part-
only 40 bcm per year between 2021 and 2024. ners during the six-month period, up 24% year
In contrast, shipments last year amounted to on year. This included 1.7 bcm in backhauled
89.6 bcm. volumes.
Some of Russia’s deliveries to Europe were Around 3.7 bcm of Ukraine’s imports were
rerouted to other pipelines, including the Turk- injected into the country’s underground gas stor-
Stream launched in January. But Gazprom’s age facilities. These supplies were stored under
overall sales have also been much weaker this the customs warehouse regime, which allows
year, due to coronavirus (COVID-19) restric- foreign companies to store gas for up to 1,095
tions, warmer weather, high gas storage levels days without paying taxes or customs duties.
and a further surge in LNG imports. Some 6 bcm in total was injected into storage
Gazprom used only 77% of the Ukrainian during the period, which is 22% more than a
transit capacity it paid for under its ship-or- year earlier.
pay contract with GTSOU in the first half, the GTSOU also transmitted 9.8 bcm of domes-
Ukrainian operator said. tic gas production, down 7% y/y, and supplied
GTSOU pointed to several achievements 15.4 bcm of gas to Ukrainian consumers. ™

P12 www. NEWSBASE .com Week 30 29•July•2020