Business news from Ukraine

UKRAINE CALLS ON GERMANY TO CANCEL EXCEPTIONS IN ITS LEGISLATION FOR SEVPOTOK-1 GAS PIPELINE

The GTS Operator of Ukraine (OGTSU) and NJSC Naftogaz Ukrainy have sent an appeal to the German Ministry of Economy and the BNetzA regulator to suspend the previously granted exemptions in the legislation for the Nord Stream 1 gas pipeline, head of the Ukrainian operator Serhiy Makogon said in a statement. TV on Friday.
He noted that the exceptions granted by JS1 were based on the fact that this gas pipeline would contribute to strengthening the security of gas supplies to Europe, the principles of market competition and the energy solidarity of the continent.
“But we see that Russia completely violates such principles. We know that they created an artificial gas deficit last year, that they unilaterally insist on paying for gas in rubles, that Russia unilaterally suspended gas supplies to Poland, Bulgaria and Finland,” Makogon recalled.
In addition, the Russian Federation seized part of the territories of Ukraine, where gas transportation infrastructure facilities are located.
“Therefore, we see that the grounds on which these exemptions for SP1 were given no longer correspond to reality. We suggest that the German government review these exemptions and actually suspend or significantly limit gas supplies to Europe through SP1,” he said.
According to the head of the OGTSU, if such a decision is made, European consumers will not suffer, since there are enough free capacities for the transit of Russian gas to the EU, incl. through the GTS of Ukraine.
Makogon recalled that it is possible to pump gas through the Sudzha gas measuring station in the amount of 244 million cubic meters. m per day with the current use of this route is about 45 million cubic meters. m.
As reported, in May 2020, the German Federal Grid Agency granted the Nord Stream gas pipeline the opportunity to derogate from the application of the main provisions of the EU Gas Directive. The adopted decision on derogation is valid for 20 years and began its effect retroactively from December 12, 2019.
When reviewing the application, the regulator noted that the gas pipeline contributed to the security of supply and did not harm competition in the European internal gas market.
Trans-Baltic gas pipeline with a length of 1224 km with a capacity of 55 billion cubic meters. m per year was introduced in November 2011.

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UKRTRANSGAZ WANTS TO REVISE MODERNIZATION LOAN FOR UKRAINE’S SECTION OF URENGOY-POMARY-UZHGOROD GAS PIPELINE

Ukrainian gas transmission system (GTS) operator JSC Ukrtransgaz (UTG) has addressed the European Bank for Reconstruction and Development (EBRD) and European Investment Bank (EIB) with a request to revise current modernization loan agreements for Ukraine’s section of the Urengoy-Pomary-Uzhgorod gas pipeline. UTG said in its press release that one of the reasons for which it is unable to implement the loan program was the operator’s failure to meet the financial stability requirements outlined in the loan agreements with the EBRD and EIB (due to tariffs for its services which have been set too low since the end of last year).
The company added that reliability and effectiveness of the Ukrainian section of the Urengoy-Pomary-Uzhgorod gas pipeline could be improved with a significantly smaller amount of assets (than it is envisaged in the loan agreements).
“For this reason the company is asking the EBRD to reduce the amount of its loan as long as a EUR 125 million investment (instead of EUR 300 million) is sufficient for the achievement of its primary goals,” reads the statement.
UTG also asked the financial institutions to hold consultations with the Ukrainian government in order to determine the extent of liability on the loan agreements for UTG and a new GTS operator as well as the mechanism for use of funds and loan servicing after the completion of the unbundling process in Ukraine.
As reported, UTG signed a EUR 300 million loan agreement with the EBRD and EIB (EUR 150 million from each) for the modernization of Ukraine’s section of the Urengoy-Pomary-Uzhgorod gas pipeline. Ukrtransgaz will also invest EUR 166 million of its own funds in the project.
Ukrtransgaz, a 100% subsidiary of Naftogaz Ukrainy, operates Ukraine’s system of trunk gas pipelines and 12 underground gas storage facilities.

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POLAND READY TO CONNECT GAS PIPELINE TO UKRAINIAN GTS

Poland is ready to launch a gas pipeline with a transmission capacity of 2 billion cubic meters, which will connect the Polish gas transmission system (GTS) with the Ukrainian one in Hermanowice (Poland), the zn.ua (Mirror Weekly) ezine reported on Thursday.
“We are ready to launch the gas pipeline, if necessary, which will connect the Polish system with the Ukrainian one in Hermanowice. Its capacity is 2 billion cubic meters. This is not much, but when Ukrainians need urgent help, we are ready to provide it,” the publication said, quoting a representative of the Polish government for the strategic energy infrastructure Piotr Naimski.
He also said that Poland is waiting for a decision from the Ukrainian side.

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BURISMA TO INVEST UAH 60 MLN IN CONSTRUCTION OF NEW GAS PIPELINE IN KHARKIV REGION

Burisma Group, a gas producer, in January 2019 started building a gas pipeline that would connect Vodianivske and Karaikozivske fields in Kharkiv region and plans to invest UAH 60 million in the project, the company’s press service has reported.
The company expects that the new gas pipeline will allow boosting efficiency of operation and management of flows between the two fields. The length of the new gas pipeline will be 16.6 km.
Burisma Holdings controls Energy & Service Company Esko-Pivnich, LLC KUB-Gas, LLC Pari, the First Ukrainian Gas and Oil Company, SystemOilEngineering, Nadragas, Aldea-Ukraine, Burisma Service, Tehnokomservis, NadraGazVydobuvannia, GasOilInvest, and NGPGeo (Oil and Gas Industrial Geologia).
Mykola Zlochevsky is Burisma’s beneficiary.

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