Page 49 - UKRRptFeb20

9.0​ Industry & Sectors 9.1 ​Sector news
9.1.1​ Oil & gas sector news
Ukraine’s mild winter allowed the country to cut gas consumption by 9% y/y in 2019​, to 30.5bn cubic meters reports the State Statistics Service. December’s balmy temperatures depressed consumption by 19% y/y, to just 3.9bcm.
Dragged down by the state gas producer, Ukraine’s gas production decreased by 1% in 2019, to 20.7bcm​, according to Ukrtransgaz. Production by UkrGazVydobuvannia dropped by 3.4% to 14.9bcm. Responsible for 72% of Ukraine’s gas production, the state company is missing the Poroshenko government’s target of ‘20bcm in 2020.’ Despite its lacklustre performance, UGV won most of last year’s public oil and gas block auctions.
Russian state-run energy giant ​Gazprom​ said on January 24 ​it expects January natural gas exports to Europe to decline by a quarter year-on-year to around 13-13.3 billion cubic meters (bcm) due to warm weather, Reuters reported​ citing Interfax. The Russian news agency said its January volumes could be the lowest in five years, citing data from Gazprom and European companies. Poland cuts gas imports from Russia 1% to 8.95 bcm in 2019
Due to a mild start to winter, Ukraine has drawn down its gas reserves by only 13%, reports Ukrtransgaz​. With the heating season almost half over, Ukraine has 19bcm in its underground reservoirs. In 2019, 36 high-temperature records were broken in Kyiv, reports the Central Geophysical Observatory. Last year, the average annual temperature in Kyiv rose to 10.6 °C (51F), which is 2.9 °C higher than the norm and the highest since 1881. On December 15, the temperature in Kyiv hit a new record: 15.2C (59F).
Ukraine increased its natural gas imports by 34.5% in 2019, to 14.2bcm​, reports Ukrtransgaz. Imports were up largely because, in preparation for gas talk with Russia, Ukraine’s 12 storage reservoirs were filled to a historic high – 22bcm. Ukraine’s domestic production also dropped. The top three gas exporters to Ukraine were: Slovakia – 9bcm; Hungary – 3.7bcm; and Poland -1.4bcm. Much of this Eastern European hub gas originally came from Russia. Ukraine stopped direct gas imports from Gazprom four years ago.
Russia increased its gas shipments across Ukraine by 3% in 2019, to almost 90bn cubic meters​, according to Ukrtransgaz. With Russia using Ukraine’s pipelines to ship 45% of its gas to Europe in 2019, Russia sent 89.6bcm to the EU and Moldova. Under the new gas transit contract, Gazprom commits to shipping a minimum of 65bcm this year. Taking into account the delay in completing Nord Stream 2 and next week’s inauguration of TurkStream, Naftogaz estimates it will handle 75bcm of Russian gas shipments this year. In 2018, Ukraine shipped 86.8bcm, 7% less than in 2017.
The total positive effect on Ukraine's economy from the contracts on extension of transit of natural gas ​signed on December 30, 2019 during five
49​ UKRAINE Country Report​ February 2020 ​ ​www.intellinews.com