Page 49 - UKRRptAug18

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9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Ukraine's state-owned natural gas monopoly Naftogaz has reached an agreement with the nation's gas pipelines operator Mahistralny Gazoprovody Ukrainy (MGU) on a roadmap of cooperation towards a full and transparent unbundling of Ukraine’s gas transmission function. The Ukrainian government still eventually plans to unbundle Naftogaz into separate production, supply and transit companies in order to meet the country’s EU integration commitment. "This is a critical milestone that will ensure Ukraine is in compliance with EU regulations while guaranteeing Ukraine’s energy security and economic prosperity," the chairman of the monopoly's supervisory board Clare Spottiswoode said in a statement. Under the agreed memorandum of understanding, the unbundling process is to be finalised at the beginning of 2020, after the existing transit contract with Gazprom expires. In February, the Arbitration Institute of the Stockholm Chamber of Commerce rejected claims of Naftogaz, which allowed the company to implement the unbundling immediately. Naftogaz faces the need to obtain Gazprom’s consent for the entrance of the independent transmission system operator (TSO) into the contract.
Oil imports down. Ukraine decreased imports of crude oil by 3.3%, or 14,071 tonnes, in January-June 2018 y/y, to 416,520 tonnes. Its value was $227.374mn, which is 24.4% more than in January-June 2017 ($182.777mn). In January-June 2018 Ukraine’s main supplier of crude oil was Azerbaijan – $214.112, followed by Algeria –$7.176mn, Iran - $4.018mn, and other countries - $2.067mn. Ukraine did not export crude oil in January-June, Interfax-Ukraine reports.
Natural gas production in Ukraine declined by 1% during the first half of this year , according to Ukrtransgaz. Last year, natural gas production increased by 4% over 2016. In 2017, private company production increased by 8.6%, almost three times the 2.9% growth rate registered by subsidiaries of Naftogaz, the state gas and oil company.
Russia’s reduced its flows of gas across Ukraine by 7% during the first half of this year , compared to the same period last year. Ukraine’s massive gas pipeline system handled 42.5bn cubic meters of gas during the first six months of this year, Ukrtransgaz reports. By contrast, Russia increased its gas flows through by 13.7% last year, over 2016, partly due to the temporary closing of Nord Stream for repairs on the line, which was commission in Nov. 2011.
Ukraine cut its gas imports by 37% during the first half of this year , compared to the same period last year, Uktransgaz reports. Of the 4.4bn cubic meters in imports, 92% came from Slovakia and Poland. Most of this gas is
49 UKRAINE Country Report August 2018 www.intellinews.com