Page 52 - UKRRptApr20

9.0​ Industry & Sectors 9.1 ​Sector news
9.1.1​ Oil & gas sector news
Capping five years of work, Ukraine launches this week virtual natural gas reverse flow with Slovakia,​ the main hub for gas exiting Ukraine for the EU. Under this system, Russian gas is shipped to users in eastern and central Ukraine, then Ukraine’s pipeline operator makes up the difference with gas pumped from storage reservoirs in Western Ukraine. This cost saving system became possible two months ago with the signing of the new EU-compliant gas contract with Gazprom, says Serhiy Makogon, CEO of Gas Transmission System Operator of Ukraine, the new spinoff from Naftogaz. Virtual reverse flow started one month ago with Poland. The system is to be established with Hungary this spring, Makogon writes on Facebook.
With EU gas prices at their lowest levels in four years, Ukrainian households will receive gas bills for February that are almost 40% below the levels of one year ago​, Prime Minister Honcharuk said Monday. Europe’s gas glut is seen as a result of a mild winter, new LNG plants coming on stream and the coronavirus threat cutting Chinese consumption. Honcharuk said: “This happened thanks to the wonderful weather.”
Low European gas prices are filtering down to the monthly gas bills paid by Ukrainian households​. Naftogaz tweets: “The gas price for March for the population has been reduced by 14%.” Ukraine’s state energy company notes that it does not supply gas directly to the population. Referring to intermediary companies, the company tweets: “We hope that private suppliers will adjust their price according to the market decrease.”
Plummeting oil and gas prices are expected to cut in half Ukraine’s bill for energy imports this year​, Sologub calcutes. The energy bill could be $6bn – half of last year’s $12bn. After a mild winter, European natural gas prices are at decade lows. The price of Brent oil has fallen in half this year, to $27 a barrel. With Russia and Saudi Arabia locked in war over market share, Citibank and Goldman Sachs predict that oil could fall to $20 a barrel in coming weeks. Energy last year accounted for 20% of Ukraine’s imports.
52​ UKRAINE Country Report​ April 2018 ​ ​www.intellinews.com