Page 8 - FSUOGM Week 38 2019

FSUOGM COMMENTARY FSUOGM
pipeline system at the start of next year. If and when Naftogaz completes the unbundling of its pipeline system, tentatively scheduled for next year, it will lose its transit revenues anyway.
Gas transit grew over 1H19 against the same period of the previous year by 6% and equalled 45.1 bcm. Higher gas demand in Europe was one of key factors driving this growth, Naftogaz reported.
The segment’s result increased from UAH2.6bn to UAH12.5bn over the first six months of 2019 compared to the same period of the previous year mostly due to higher gas transit tariffs, higher transit volumes and lower depreci- ation expenses in the cost of gas.
The result of the domestic gas transmission segment deteriorated by UAH3.1bn over the first six months of 2019 due to lower domestic transmission volumes and doubtful debt allow- ance arising from significant amounts of unpaid balancing services. Receivables from balancing services grew by UAH13.8bn or 49.5% as of 30 June 2019 compared to the same period during the previous year.
Gas storage
In anticipation of a new gas war with Russia, Naf- togaz has been storing as much gas as it can and currently has 20 bcm of gas in various facilities – enough, the company claims, to be able to meet
its commitments domestically and internation- ally over the winter months should Gazprom cut the country off.
Naftogaz reported that 5.2 bcm of gas was withdrawn from underground gas storage (UGS) facilities over the first six months of 2019, which is 2.1 bcm or 29% less compared to the same period during the previous year.
Significant offtakes from UGS facilities in 2018 were due to the growing gas demand at the end of the heating season 2017/2018 caused by cold weather and lower pressure in the gas trans- mission system from the Russian side.
To ensure secure supply of gas during the heating season 2019/2020, Naftogaz and other traders have injected extra volumes of gas to its UGS facilities. Gas injection over the first six months of 2019 exceeded that of the same period during the previous year by 1 bcm or 26%.
The segment’s first-half result in 2019 was up by UAH1bn thanks to changes in the gas stor- age tariff, though it remains loss-generating as in the first half of 2018, with a negative result of UAH-0.1bn.
Taxes and other payments to the state budget
Naftogaz group paid UAH58.6bn in taxes over the first six months of 2019, accounting for 15.9% of state budget revenues for this period.
Naftogaz is now the biggest single contributor to Ukraine’s state budget. ™
PIPELINES & TRANSPORT
Ukraine reports record gas stocks
UKRAINE
Ukraine aims to have more than 20 bcm
of gas stored for the heating period, versus 16.9 bcm last year.
UKRAINE has built up its largest reserves of gas in years as the first snows start to fall in region, in anticipation of a new gas war with Russia this winter after their mutual gas transit contract expires on January 1, 2020.
Ukraine boosted its natural gas stocks in underground storage facilities by 2.3 times, or 11.131bn cubic meters (bcm), to 19.877 bcm from early April to September 21, according to data published by the nation’s state-owned gas operator Ukrtransgaz.
Ukraine, concerned about a possible fall in Russian gas transit this winter, plans to stockpile at least 20 bcm of gas for the coming heating sea- son compared with 16.9 bcm it had stored for the previous cold period.
According to calculations of news agency
Interfax, this volume exceeds the inventory indi- cator as of September 21, 2018 by 26.2% and that as of September 21, 2017 by 24.7%.
Over the past months, Ukraine was actively preparing for possible halt by Russia’s Gazprom to gas transit shipments via Ukraine from Janu- ary 1. According to last week’s statement of the nation’s state-owned monopoly Naftogaz, this is “a base-case scenario”.
Kyiv believes that Russia will suspend deliv- eries of gas, including the transit gas to Russia’s European customers via Ukraine, on January 1, 2020, when the current contract for gas transit to Europe between Russia’s Gazprom and Ukraine expires. More than a third of Europe’s gas comes from Russia, and most of that goes through Ukraine’s pipelines. ™
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w w w . N E W S B A S E . c o m Week 38 25•September•2019