Russia acting to prevent Ukraine from importing gas from the EU

As soon as Ukraine’s Energy Minister Yuriy Prodan revealed on Sept. 10 the government’s plan to accumulate 17.2-17.5 bcm of natural gas by end-October (up from 16.1 bcm currently), a series of reports surfaced indicating Gazprom is trying to prevent Ukraine from accumulating more reserves. Ukraine’s monopoly gas importer Naftogaz (NAFTO) reported that day it received a notice from its Polish counterpart, Gaz System SA, that it had to stop supplying gas to Ukraine after underreceiving 20%-24% of its planned gas from Gazprom over the last two days.



Additionally, Ihor Prokopiv, the CEO of Ukrtransgaz, Ukraine’s gas transportation operator, told journalists the same day that Gazprom artificially inflated the price of gas supplied to Hungary. The resulting gas price in Hungary is currently USD 400/tcm, which is too expensive for Ukraine to import, he said, as cited by Interfax-Ukrayina. Recall, Ukraine is declining to buy natural gas from Gazprom at USD 385.5/tcm.



After Gazprom stopped supplying its gas to Ukraine on June 16, Ukraine started buying the same Russian gas from EU countries. Hungary and Poland were the only gas suppliers to Ukraine in August 2014, having supplied 128 mcm and 121 mcm of gas, respectively. In September, Ukraine opened a new route of gas imports, Slovakia, importing 223 mcm of gas from there during the first nine days of the month.



Alexander Paraschiy: The Russian gas monopoly is trying to gain leverage for the next gas negotiations with Ukraine, whose date will be determined by the end of this week. Clearly, the most critical route for Ukraine’s gas imports is currently Slovakia, and we do not rule out some negative surprises from that side in the next days. For instance, Germany also felt some decline in Russian gas supplies, according to a Sept. 10 report of Der Spiegel.



Thus far, Ukraine’s bargaining position looks a bit stronger than the Russian one. With the Slovakian route still open, Ukraine’s plan to accumulate up to 17.5 bcm of gas by end-October looks affordable. This amount will be enough for Ukraine to survive the winter (again, assuming the Slovakian route remains open) by merely decreasing gas consumption by 25% yoy in 4Q14 and 1Q15 (the Polish and Hungarian routes do not help much here). The Ukrainian government is already taking measures to reduce consumption to make this goal realistic.

Источник: Конкорд Капитал