Page 56 - UKRRptJul21

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
US and Germany are working to draw up a deal to shore up Ukraine’s energy sector to blunt the impact of Nord Stream 2, Bloomberg reports from Berlin and Washington. Elements could include: building up a hydrogen production industry in Ukraine; requiring Russia to keep minimum gas flows across Ukraine through the 2020s; and Germany supporting the “Three Seas Initiative” to build up central European pipelines connecting LNG terminals in Poland and Croatias. The package would be largely finalized in time for German Chancellor Angela Merkel’s visit to Washington on July 15 and President Zelenskiy’s visit several days later
With Europe facing a 25% cut in pipeline gas from Russia in July, Gazpromon June 29 refused Ukraine’s offer to ship 50% more Russian gas to the EU in July. Two Russian pipelines – Nord Stream 1 and Yamal-Europe – are to undergo maintenance in July, reducing flows from Russia by 2.2bn cubic meters. With these scheduled shutdowns in mind, Ukraine’s Gas Transmission System Operator offered to increase daily transit by 51%, to 188mn cubic meters.
Ukraine is negotiating with investors to build a new oil refinery and will be a partner in the project, Kyrylo Tymoshenko, Deputy Presidential Chief of staff, tells Interfax-Ukraine. Ukraine’s only working oil refinery, in Kremenchuk, cannot make up for this month’s shortfall in gasoline imports from Belarus, nor can it meet the government’s increased demand for bitumen for the ‘Big Construction’ road building project. Two months ago, on a visit to Qatar, President Zelenskiy reached preliminary agreements on the construction of new oil and gas terminals in Odesa.
Ukraine’s east-west gas pipeline system is operating at less than 20% of its design capacity, Volodomyr Gnoevoy, head transit for YE Energia, said in mid-June at the Ukrainian Gas Open Forum. Designed to carry 400bn cubic meters, the system now carries 30bcm for domestic consumption and 40bcm for transit. If Russia stops sending gas across Ukraine at the end of the 2024 contract, “all this financial burden will fall on the shoulders of domestic consumers,” he said.
To upgrade gas links with Poland, work is underway on modernizing the final stretch of an 80 km pipeline from the Polish border to the Komarno compressor station in Lviv region, reports Serhiy Makogon, Director General of Ukraine’s Gas Transmission System Operator. Although work is to be completed by this time next year, the cross border pipeline links will be inadequate for Ukraine to meet its goal of receiving from Poland 6.6 billion cubic meters – slightly more than half of Ukraine’s total annual imports. Referring to Poland’s Baltic liquefied natural gas landing terminal on the Baltic, Makogon said: “"We are actively working on creating alternative gas supply routes to Ukraine, and Poland is a key direction for us, given the existing LNG terminal in S´winoujs´cie.”
56 UKRAINE Country Report July 2021 www.intellinews.com