Page 62 - UKRRptNov19

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Ukraine's parliament adopted in mid October on first reading an EU- compliant ‘unbundling’ bill designed to create a state-controlled gas pipeline operator independent of Naftogaz. "It is very important for us to approve it in the first reading, so that next week we will go to negotiations with Russians with a strong position," Prime Minister Oleksiy Honcharuk said before the vote. The draft bill’s explanatory note said the bill is necessary to change Ukraine's natural gas and electricity market to ensure its liberalization, efficiency, transparency, and compliance with EU laws.
Russia will pump at least 50bn cubic meters of gas across Ukraine next year, the central bank forecasts, citing Gazprom’s contractual obligations. This volume would bring Ukraine about $2bn in transit fees. Through September, Ukrainian pipelines shipped 64bcm to Europe and Moldova, up 1% y/y. Last year, Ukraine shipped 87bcm. On Monday, Russia-EU-Ukraine talks start again in Brussels to forge a gas transit contract to replace the 10-year contract that expires Jan. 1.
Ukraine’s state gas transit system is fully prepared for winter with 20.8bn cubic meters in storage, reports Ukrtransgaz. "Ukrtransgaz has completed 100% repair work and modernized the gas transit system of Ukraine within the framework of the plan of preparation for work in the autumn-winter period 2019/2020," the company reported.
Ukraine imported 11.6bn cubic meters of gas between January and September 2019, which is 44% more than the same period last year, reports Ukrinform. The gas was imported from EU suppliers.
Ukrainians used 7% less natural gas in the first nine months of this year,
according to Ukrtransgaz, the company operating Ukraine’s state gas transit system. Between January and September 2019, Ukrtransgaz delivered 17.9bn cubic meters of gas via its pipelines to customers, down 7% from the same period last year.
Russian gas transit across Ukraine is up 1.3% through September, to 66.3bn cubic meters. Last year, 87bn cubic meters flowed across Ukraine, earning the country about $3bn in transit fees. These revenues are threatened by Gazprom’s two bypass pipelines – Nord Stream to the north, and Turk Stream to the south.
Putin does not rule out gas deal with Ukraine under EU rules. Russia will be ready to work under EU legislation and sign a contract with Ukraine for natural gas transit under EU rules if Ukraine manages to implement such EU gas legislation by end-2019, Russian President Putin told reporters at the Russian Energy Week forum in Moscow. In the other case (which Putin said he believes to be more likely), Russia will be ready to extend the existing gas contract with Ukraine for about one year. Putin also said that the deal “should be economically feasible for all participants,” as reported by the Interfax news agency. Recall, the 10-year contract for the transit of Russian gas through
62 UKRAINE Country Report November 2019 www.intellinews.com