Page 63 - UKRRptJul20

9.0​ Industry & Sectors 9.1 ​Sector news
9.1.1​ Oil & gas sector news
Ukraine’s 5-year $7bn gas transit contract with Russia could be threatened by a move to undermine the independence of Ukraine’s gas transmission operator ​at a time when EU certification is underway. Aura Sabadus warns in an Atlantic Council blog that political moves by pro-Russia Rada members could give Gazprom the opening to walk away from the ‘take or ship’ contract, which is proving costly to Russia’s state energy company. Sabadus writes: “Since the beginning of the year, Russia transited an average of 133mcm/day, which means that it has been using only three quarters of the total booked capacity, but paying for the full 178mcm/day at a time when European hub prices fell to record lows, shrinking Gazprom’s profits.”
Ukraine’s natural gas reserves in storage increased last week to 19.2bcm, 48% higher than this time last year​. Ukraine’s underground storage system consists of 12 depleted fields, largely in the west, but also in Sumy, Kharkiv and Luhansk oblasts. Ukrtransgaz reports the system is 62% full.
Naftogaz Ukrainy in July 2020 will raise the price of natural gas sold to industrial consumers on a prepayment basis by 9.7%​ (by UAH 314.4) compared to the price of the current month, to UAH 3,570 for 1,000 cubic meters (including VAT).
Naftogaz​ group paid UAH31bn ($1.2bn) of taxes and duties to the state budget in January-May 2020.​ Revenues from Naftogaz group exceeded 11% of total state budget revenues in January-May 2020. Naftogaz group remains Ukraine’s biggest taxpayer. In 2019, Naftogaz group’s tax and dividend payments to budgets of all levels totalled nearly UAH121bn.
Russian gas transit through Ukraine dropped by 46% in January-May to 20bn cubic meters (bcm), ​Ukrainian state-run gas transit operator said on June 1. Russian and Ukrainian gas firms signed a five-year deal in December safeguarding the transit of Russian gas to Europe via Ukraine, following five days of painstaking talks and a meeting between Russian and Ukrainian leaders. The operator said this year the transit could fall to an all-time low of 52-55 bcm this year. Last year, the gas transit totalled almost 90 bcm.
Poland could increase gas supplies to Ukraine 5-fold this year, ​PGNiG CEO Jerzy Kwiecin´ski, CEO of PGNiG, Poland’s state energy company, tells Polish Radio 24. During the first quarter, PGNiG sold 690mn cubic meters of gas to Ukraine. If rates are maintained, Poland could ship 2.7bcm to Ukraine – five times the 554mn cubic meters of last year. With storage reservoirs filling fast, it is not clear if Ukraine wants to buy that much gas. At the beginning of last winter’s heating season, Ukraine had 21.8bcm in storage, a record high for the decade.
Taking advantage of historically low gas prices, Naftogaz has increased
63​ UKRAINE Country Report​ July 2020 ​ ​www.intellinews.com