Ukraine resumes imports of Russian coal and gas, considers electricity

The Russian government has decided to resume coal supplies to Ukrainian consumers after nearly two weeks of blockade, Ukraine’s Energy Ministry reported in a Dec. 6 press release. Railcars with about 50 kt of coal from Russia are headed for Ukrainian power plants, according to the report. The first information about a blockade of coal imports from Russia appeared on Nov. 24. In other news, DTEK top manager Vitaliy Butenko told Hromadske TV on Dec. 5 that the holding got permission to transport coal from its Russian mines to the Luhansk Thermal Power Plant. The plant ran out of coal on Dec. 3 due to damaged transport infrastructure and Russia’s blockade on Nov. 26 of the only supply route.



In other energy-related news, Naftogaz paid USD 378 mln to Gazprom as prepayment for 1 bcm of natural gas. The tranche reached Gazprom accounts, according to a Gazprom spokesman, as cited by the Interfax news agency on Dec. 8. Also, Ukraine’s Energy Ministry reported on Dec. 7 that it got permission from the Cabinet to import electricity from “neighboring countries” (Russia) in order to avoid peak electricity cuts. The price for such electricity should not exceed the average price of power gained from domestic thermal power plants in the previous month (it should not exceed USD 60/MWh in December, we estimate).



Alexander Paraschiy: The previous week was tough for the Ukrainian energy system, with a coal deficit and an unplanned outage of a nuclear power unit, which led to a deficit of electric capacities in peak times and forced electricity companies to undergo a series of rotional power cuts in the evenings. A resumption of coal supply from Russia, in the size that the Energy Ministry declared, does not solve the problem of the nation’s energy deficit since it’s enough for just two-three days of the normal operation of Ukrainian power plants that consume deficit grades of coal (i.e. anthracite coal, which Ukraine mines a lot of, though all such mines are currently in the occupied territory of Donbas).



Just as we do not understand the reasons why Russia earlier cut coal supplies, we cannot be sure that a new blockade won’t be imposed again soon. We also can’t be sure that Russia will supply power to Ukraine once it needs it in peak times. What we can say confidently is that Ukraine became much more dependent on energy supplies from Russia after the latter launched military actions in Donbas. And there is more risk that Russia will use such dependence to pressure Ukraine politically.



These decisions are already drawing criticism for Ukraine‘s ”sleeping with the enemy.” But the government has too few opportunities to decrease this dependence by the end of heating season (mid-April), while it will have to do something this spring to prepare for the next.

Источник: Конкорд Капитал