Page 73 - UKRRptApr24

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Ukraine refuses to import gas and is preparing for zero transit. As a memorandum with the IMF states, "Limited domestic consumption and growing domestic production limited the need for gas imports during the last heating season. For the next heating season of 2024/25, authorities do not plan additional gas imports for domestic consumption due to Naftogaz's expansion of production capacity.” At the same time, it is noted that Ukraine will be able to receive three billion cubic meters of additional gas for storage by non-residents for the needs of EU countries. "The updated strategies of the GTS Operator of Ukraine (OGTSU ) and the gas transport industry appropriately reflect the new operating environment and are designed to optimize the system's size and identify alternative sources of gas supply," the document says. This will be crucial for the OGTSU in terms of financial and operational preparation for the zero-transit scenario when the current contract for the transit of Russian gas expires at the end of 2024.
Ukraine suffers losses from the transit of Russian gas. Naftogaz of Ukraine is suffering significant losses from the transit of Russian gas, the chairman of the company’s board, Oleksiy Chernyshov, said. Since May 2022, Ukraine has stopped gas transit through the Sokhranivka route following the Russian occupation of the northern part of the Luhansk region, and Russia refuses to transfer these volumes to the Suja gas station. As a result, Gazprom pays only 66% of what is stipulated in the contract, about $800M out of $1.2B per year. And Naftogaz is contractually obliged to reserve all the capacity of the Ukrainian GTS. "That's why we currently receive less than we pay to the GTS Operator," said Chernyshov. Since September 2022, Naftogaz has been challenging Russia's underpayment for transit in Stockholm arbitration. According to the head of the company, a decision will be made at the beginning of 2026. Naftogaz's current claim is $800M, but this amount will increase to almost $1.4B by the end of the year.
Ukraine is ready to ensure the security of Russian gas supplies to Europe through its territory next winter and beyond, but all European countries have pledged to phase it out by 2027, head of the country’s Gas Transmission System Operator (GTSOU), Dmitry Lippa said.
"We say that if our partners do not have time to reformat their sources of supply and are forced to turn to the Russian Federation next year, then this will be their decision. As our political leadership, the Prime Minister, accordingly said, we will provide such a service," Lippa said on the Rada TV channel.
"We will be able to ensure security of supplies next winter for our European partners. We will see how they will build their market in the coming years," he added.
Lippa noted that the main consumers of Russian gas supplied through the territory of Ukraine are Austria and Slovakia. "However, it should be clearly
73 UKRAINE Country Report April 2024 www.intellinews.com