Page 62 - UKRRptFeb19

Gazprom has started decommissioning Russian compressor stations on gas pipelines leading to Ukraine , Alexander Babakov, Director General of Gazprom Transgaz Moscow, tells Russian media. Three have been closed since 2017. “In the next two years we plan to decommission four more,” Babakov said of pumping stations that compress gas to push it through pipelines. Ukraine inherited 38,550 km of pipelines from the Soviet Union. The main function is to send Russian gas to Europe. This job that could be largely superseded by the commissioning of Nord Stream 2, a doubling of an existing Russia-Germany pipeline. On Sunday, Interfax-Ukraine quoted Babakov’s boss, Alexey Miller, Gazprom CEO, saying of Nord Stream 2: “The plan for the start of gas supplies is January 1, 2020.”
Under strong EU pressure, Ukraine will split up natural gas production and transportation operations , promising to adopt the legal framework in the first few months of 2019, S&P Global Platts reports from Kyiv. Janez Kopacˇ, the Energy Community Secretariat director, says: "Unbundling should be designed in a way that the transmission system operator can be certified before the end of next year." Failure to ‘unbundle’ according to EU rules, will give an advantage to the Nord Stream 2 Russia-Germany gas line if it is commissioned on schedule, one year from now.
German leaders say some Russian gas must continue to go through Ukraine. Russians officials refuse to make a commitment. The EU is pressuring Russia and Ukraine to negotiate a new gas transit contract to replace one that expires Dec. 31, 2019. Tomorrow, to make Ukraine’s pipeline system competitive with Nord Stream 2, Naftogaz cuts in half the tariffs at all pipeline entry points, to $6.28 per 1,000 cubic meters. Through Oct. 1, the volume of Russian gas shipped through Ukraine’s pipelines, dropped by 7% compared to the same period last year, to 65.4bn cubic meters. The drop cost Naftogaz $89mn in lost revenues.
Prices for gas imported by Ukraine from European countries hit a record high in November , according to data published by the country’s State Fiscal Service. The gas is most likely Russian in origin resold to Kyiv at a premium. The State Fiscal Service of Ukraine calculated an average cost of imported natural gas that formed during its customs clearance when it enters the territory of Ukraine. “The price totaled some 9,472 hryvnia ($339.2) per thousand cubic meters of the fuel,” the statement said, as quoted by the Ukrainian Independent Information Agency UNIAN. In October, Kiev reportedly bought the vital fuel at $323.44 per thousand cubic meters, while the September price amounted to $304.36, compared to $261.1 paid in February.
The first 10 oil and gas permits were posted in December on the government’s electronic auction platform ProZorro.Sales. Nine of the permits are for exploration and production, for 20 years. One is for exploration only, for five years. The 10 plots cover 1,800 square kilometers, an area with estimated gas reserves of 90bn cubic meters and oil reserves of 115mn barrels. Companies have 90 days to register and to prepare their bids for the auctions on March 6. This first lot represents one third of 30 permits that the state Geology Service, Gosgeonedr, plans to put up for auction in the first half of next year.
Ukraine has reduced gas imports from the EU countries by 22.9%
62 UKRAINE Country Report February 2019 www.intellinews.com