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its European Union (EU) customers via Ukraine’s pipeline system are due to expire at the end of 2019.
Qatar, the world’s largest natural gas exporter, is laying the groundwork for a strong food for gas trade relationship with Ukraine, a major food exporter, according to a the newly formed Qatar-Ukraine Business Forum. With the largest gas storage reservoirs in Eastern Europe, about 20bn cubic meters, Ukraine is studying importing Qatari LNG gas through Adria LNG, a floating terminal planned for offshore Croatia. On the Qatari end, $275mn is being invested in Hamad Port on the Persian Gulf to build food warehouses sufficient to store enough food for Qatar’s 2.7mn people for two years. Eighteen months ago, Saudi Arabia started a regional boycott of Qatar.
Ukraine’s national gas company Naftogaz filed a new claim $12bn claim against Russian state-owned gas monopoly Gazprom in international courts for potentially impairing gas deliveries, Naftogaz CEO Andrei Kobolev said on January 9 in an interview with Ukraine’s Channel 5. "Naftogaz filed a new claim amounting to $12bn against Gazprom. The main base of this claim is impairment of our [gas transport system] because Gazprom will build bypassing flows and will not honour its obligations to Naftogaz as to the contract holder," Kobolev said as cited by Interfax. This will provide an opportunity for Ukraine to compensate losses from bypassing transit of Russian gas, Kobolev noted.
Ukraine has announced tenders for 12 production sharing agreements (PSA) to develop domestic hydrocarbon deposits as part of the country’s on going efforts to reduce its dependence on Russian gas, Interfax Ukraine reported on January 8. The relevant resolutions of the Cabinet of Ministers dated December 18, 2018 were published in the Uriadovy Kurier newspaper on January 5, 2019, making them official. Some 12 fields were put up for auctions, including Hrunivsky, Varvynsky, Rusanivsky, Okhtyrsky, Buzivsky, Zenkivsky, Ivanivsky, Ichniansky, Balakleisky, Sofiyevsky, Berestiansky, and Uhnivsky. The fields are located in Ivano-Frankivsk, Lviv, Poltava, Chernihiv, Sumy, and Kharkiv regions. The PSA will run over 50 years and are designed to attract foreign investor’s interest in the projects. Bids for the tenders have to filed by April 8. The state's share in profitable products should be at least 11% of its total volume, while the maximum investor's share of the PSA is limited to 70% of total production, until the investor’s expenses have been fully reimbursed, Interfax reports. The tenders set the minimum investment requirement at each project. At the first stage of exploration (within five years) the minimum investment in Varvynsky, Ichniansky, Sofiyevsky areas amounts to UAH1bn, Hrunivsky not less than UAH850mn, Rusanivsky, Ivanivsky, Balakleisky not less than UAH800mn, Okhtyrsky, Buzivsky, Uhnivsky not less than UAH600mn, Zenkivsky not less than UAH500mn, and Berestiansky some UAH450mn. Tenders on the first ten sites were initiated by the US-Ukraine Business Council (USUBC) and the investment company SigmaBleyzer, and the rest of deposits by Ukraine's Navigator Komplekt LLC.
Russian gas flowing through Ukraine to Europe fell by 7% in 2018, to 86.8bn cubic meters, according to Ukrtransgaz, the national pipeline operator. In 2017, transit increased by 14% over 2016, largely to Gazprom’s repairs on Nord Stream 1 pipeline. This time next year, Gazprom plans to commission Nord Stream 2, doubling Russia’s Baltic pipeline capacity to 110bn cubic meters. This could cut the flow of Russian gas through Ukraine by at least one half in 2020.
61 UKRAINE Country Report February 2019 www.intellinews.com