Page 47 - UKRRptOct18

9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Ukraine's Naftogaz is insisting that Gazprom compensate it for losses incurred from the need to purchase gas in the EU after its contract with Gazprom was amended by the Stockholm Arbitration Court in Dec 2017. The contract volume was cut 10x to 5bcmpa and the pricing formula was changed from oil-linked to German NCG hub plus transportation costs. Naftogaz estimates its losses at $120mn to date. Furthermore, Naftogaz has indicated that appropriate compensation could come in the form of Gazprom's shares in Nord Stream-2. Their sale on the open market could help to recompense part of the $2.6bn that Naftogaz seeks from Gazprom following the Stockholm court's decision, and, which Gazprom is currently appealing.
Through August, Ukraine has cut its gas imports by 27% yoy, to 6.9bn cubic meters , reports Ukrtransgaz, the state-owned pipeline operator. Top suppliers are: Slovakia 4.3bcm; Hungary 2.8bcm; and Poland 519mn cubic meters. Although much of gas consumed in Ukraine originally comes from Russia, Ukraine has not bought gas directly from Gazprom since Nov. 2015. In Sept. 2014, Slovakia reversed a major pipeline and started sending gas to Ukraine. Gazprom complained and cut its gas deliveries to Europe by 25% through the winter. In face of mounting fines, Gazprom relented and restored volumes in March 2015.
Ukraine in January-July 2018 imported 5.3bn cubic meters of natural gas worth US$1.5bn from European countries . Ukraine received 2.1bn cubic meters of gas worth $590.7mn from traders registered in Switzerland, 1.8bn cubic meters worth $513.6mn from Germany, 438mn cubic meters worth $130mn from Poland, 345.4mn cubic meters worth $95mn from the United Kingdom, 169.5mn cubic meters worth $46.4mn from the Czech Republic, 164.6mn cubic meters worth $44.8mn from Hungary, 89mn cubic meters worth $24mn from Slovakia, and 70mn cubic meters worth $20mn from Luxembourg, according to the State Statistics Service. Ukraine in late November 2015 refused to purchase natural gas from Russia's Gazprom. In general, the country doubled gas imports from Europe in 2015 from 2014, to 10.3bn cubic meters, reducing by 56.5% the purchase of hydrocarbons from Russia. In 2016, Ukraine imported 11.1bn cubic meters of gas from Europe alone, gas imports in 2017 totalled 13.9bn cubic meters. Natural gas shipments from abroad in 2017 were estimated at $3.228bn.
At a meeting in Moscow on September 18, Hungary’s Prime Minister Viktor Orbán asked Russian President Vladimir Putin to supply gas to Hungary by extending the TurkStream gas pipeline to bypass Ukraine . At the end of next year, TurkStream is to reach the Greek-Turkish border. Orbán proposes the Russians build additional pipelines and connectors to send the gas 1,200 km north to Hungary. Orban said at a joint Kremlin press conference with Putin: “I asked Mr. President to seriously think about this possibility.” Putin responded: “I do not rule out that after the Turkish Stream is built, one of the land branches of this gas main could pass through Hungary.” Currently, most
47 UKRAINE Country Report October 2018 www.intellinews.com