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Ukraine’s state-owned gas transport operator Ukrtransgaz has warned of a threat to the operation of the gas transmission system of Ukraine after June 24 due to the company's failure to purchase natural gas for its own technical needs on time due to the lack of funds. According to the company, it has initiated negotiations with creditors, including the parent gas monopoly Naftogaz on debt restructuring. The National Security and Defence Council (NSDC) of Ukraine was "notified about the situation", the company said in a statement on June 14. Ukrtransgaz's debt to fuel gas suppliers reached UAH4.1bn ($154mn) in March-April, and some of them have refused to supply gas volumes under existing contracts. The residual volumes of gas for technological needs, purchased under preliminary contracts, are sufficient to ensure the operation of the gas transmission system only until June 24.
Pumping gas into storage at record rates, Ukrtransgaz has filled Ukraine’s 12 storage reservoirs to 37% of their 31 billion cubic meter capacity. After the national heating season ended April 5, the state pipeline company started filling the reservoirs, preparing for a possible end of Russian gas transit across Ukraine on Jan. 1. Separately, from January to April, natural gas production in Ukraine grew by 3.6% y-o-y to 7 billion cubic meters, the Energy and Coal Industry Ministry tells Interfax-Ukraine.
Ukraine’s state-owned gas transport operator Ukrtransgaz believes that the nation's gas market is facing "the pre-default state" over the negative balance appeared mainly due to "the unauthorised gas pumping" from the system. According to the company, the amount of negative balance, formed mainly as a result of the unauthorized pumping of gas by gas distribution network operators for their own operation costs in monetary terms amounted to UAH2.5bn ($93mn) in March-April. Of this amount owed to the company, only UAH0.05bn was repaid, Interfax reported on June 5. At the same time, the volume of positive non-balances amounted to UAH0.53bn, of which Ukrtransgaz paid only UAH0.27bn to counterparties. In addition, the debt to the company for balancing over previous periods (before the launch of the system of daily balancing) amounted to UAH38.6bn. These funds are reimbursed only in via a court ruling, the company added. "The gas transmission system operator does not have funds to pay for positive imbalances to the market players. As a result, a pre-default situation has arisen on the market - the gas transmission system operator cannot fully repay its financial obligations to customers of transportation services," the company's statement reads.
Ukraine’s national gas monopolist Naftogaz Ukrainy has calculated the new price of natural gas for the needs of households for June, setting it at UAH5,553.89 per 1,000 cubic meters (VAT, delivery costs and supplier markup are not included), the press service of the company has reported, Interfax Ukraine reported on June 14.
This price is 11.8% or UAH746 lower than the price for June announced earlier (UAH6,299 per 1,000 cubic meters).
The company said that the price was calculated in accordance with government resolution No. 485 dated June 5, 2019, according to which Naftogaz takes the smallest of the four indicators when determining the gas price for households. In particular, these are the following indicators: the price for commercial consumers for the past month, the average customs value of imported gas for the previous month, the average price at the Ukrainian Energy Exchange, and the price of gas under public service obligations (PSO) set in resolution No. 867 dated October 19, 2018 at the level of UAH8,550 per 1,000 cubic meters.
62 UKRAINE Country Report July 2019 www.intellinews.com