Chief Executive Officer of NJSC Naftogaz of Ukraine Andriy Kobolev has expressed fears that the Russian side will do everything to delay negotiations on the extension of the contract for gas transit through Ukraine, expecting possible changes in the country’s top officials and policy. “Most likely, they are waiting for elections in Ukraine and they want to see if there is any change in power and the country’s political course. They will do everything possible to launch the Nord Stream 2 pipeline construction,” Kobolev told the Kyiv-based Interfax-Ukraine news agency.
Kobolev said Russians now express readiness to study the issue of moving to work within the framework of European legislation, but they are stalling and trying to introduce the issue of negotiating settlement agreements in a trilateral format.
“Until recently, Russians’ position was not constructive. Before the agreement on something under the transit contract, they want to talk about amicable deals within the Stockholm litigation, that is, raise questions that are unacceptable not only for us, but for any party , which won in court,” he said.
Kobolev expressed hope the third party of the negotiations represented by the European Commission would have an impact on Russia, since stalling the process is not advantageous to Ukraine and European consumers of Russian gas.
“As our experience shows, a force majeure signing at the end of 2019 would be a very bad story. I hope that the position of Europeans may lead to a change in the tactics of Russians and they will be forced to negotiate before the end of 2019 about a new format of relations from January 2020. We are working actively on this now. The European Commission is in agreement with us in the application of European law. If we agree on this as a basis, then all further actions become much easier and more effective,” Kobolev said.
Public joint-stock company Ukrtransgaz on June 22 and June 23 announced 12 tenders to buy gas for technological needs and balancing in the amount of 2.437 billion cubic meters with the expected cost of UAH 21.202 billion (VAT not included).
The bids can be submitted before July 23 and July 24 (depending on the lot). The auctions will take place on August 28 and August 29.
The final price of gas to be paid by Ukrtransgaz to the winners of the tenders will be determined, taking into account quotations at NetConnect Germany (NCG) in the period when gas is delivered.
JSC Ukrgazvydobuvannia in January-May 2018 increased gas production by 1% or 0.063 billion cubic meters (bcm) year-over-year, to 6.288 bcm, the company’s press service reported last week. The press service said that this production volume in the first five months of the year was reached for the first time since 2014. “For the fourth consecutive month, the company has been increasing daily gas production within the limits of 1 million cubic meters due to all types of operational activity, but since the existing resource base of the company is almost 70% depleted, the natural decline exceeds the growth. The non-issue of new licenses hinders the development of the new resource base of Ukrgazvydobuvannia,” the head of the company, Oleh Prokhorenko, said.
At the same time, he said that the company from the end of this month overcame the May negative factor and moved to the actual increase in daily production compared to last year.
The press service said that in the third and fourth quarters of 2018, Ukrgazvydobuvannia plans to launch new technological capacities: eight booster compressor stations, an increase of up to 50 tools for work-out of wells of external contractors, ten coiled tubing and nitrogen units, and the launch of new wells of external drilling contractors.
Ukrgazvydobuvannia, which is wholly owned by NSJC Naftogaz Ukrainy, is a large gas processing company, which accounts for about 75% of total gas output in the country.
DTEK’s mines in April 2018 increased gas coal production by 5% compared to April 2017, to 2 million tonnes, the company’s press service has reported.
“The growth in production at DTEK Pavlohradvuhillia in April this year was 3% compared to April 2017, to 1.7 million tonnes, at DTEK Dobropilliavuhillia it stood at 19%, to 334,000 tonnes,” the report said.
According to the press service, in April the company invested UAH 387 million in the development of production at the mines of DTEK Pavlohradvuhillia and DTEK Dobropilliavuhillia. Of these, UAH 167 million was invested in the purchase and overhaul of purification equipment, UAH 94 million in capital mining and UAH 29 million in tunnel equipment.
Since the beginning of the year, 12 longworks have been commissioned at DTEK’s coal enterprises.
Ukraine boosted natural gas consumption in January-April 2018 by 4%, or 600 million cubic meters (mcm) year-over-year, to 15.8 billion cubic meters (bcm). In particular, the industry consumed 5 bcm of gas (a 25% increase from January-April 2017), while households, municipal heat suppliers and budget organizations used 9.6 bcm (a 4% decrease), the Ukrainian Energy and Coal Ministry has said.
Some 1.2 bcm of gas was used for production and other needs (no change year-over-year). As was reported earlier, Ukraine in 2017 reduced natural gas consumption by 0.5%, or 161 mcm of gas from 2016, to 32.2 bcm.
Ukraine will receive about $3 billion each in 2018 and 2019 as revenues from natural gas transit, Naftogaz Chief Commercial Officer Yuriy Vitrenko has said.
“The revenues from transit should be at the level of $3 billion each in 2018 and 2019,” he wrote on his Facebook page on Tuesday.
According to the ruling of the Arbitration Institute of the Stockholm Chamber of Commerce, Naftogaz should receive money from the transit through Ukraine’s gas transport system of 110 billion cubic meters of Russian gas regardless of actual volumes of transportation. The contracts between Gazprom and Naftogaz for gas supply and transit are valid until the end of 2019.
According to Naftogaz CEO Andriy Kobolev, this is not a classic “take or pay” case, but if Gazprom does not fulfill the contractual volume of transit of 110 billion cubic meters per year, Naftogaz will again file a claim with the arbitration court and will sue the Russian company for non-fulfillment of the terms of the contract.
