Business news from Ukraine

UKRAINE DISAPPOINED WITH HUNGARY’S DECISION TO SIGN CONTRACT WITH RUSSIA’S GAZPROM FOR SUPPLY OF GAS BYPASSING UKRAINE

Ukraine is surprised and disappointed with Hungary’s decision to sign a new long-term contract with Russia’s Gazprom in Budapest on September 27, 2021, regarding gas supply to Hungary bypassing Ukraine, the Ukrainian Foreign Ministry said in a statement.
“We view this as nothing but a political, economically unfounded decision, which has been made to the benefit of the Kremlin and to the detriment of national interests of Ukraine and Ukrainian-Hungarian relations, in violation of the principles of the Treaty of Neighborliness and Cooperation between Ukraine and the Hungarian Republic dated December 6, 1991,” the statement said.
The Ukrainian Foreign Ministry has initiated a delay of the next meeting of the Joint Ukrainian-Hungarian Intergovernmental Economic Cooperation co-chaired by the two foreign ministers, which was planned for September 29-30.
“Earlier today, the Ukrainian Foreign Ministry initiated a delay of the Commission meeting, considering that the Hungarian-Russian gas agreement will have a substantial influence on the energy security of Ukraine and Europe, and will create new circumstances that require a comprehensive analysis of risks and threats and coordinated efforts of countries of the region in order to minimize its negative implications,” the statement said.
The Ukrainian side will also apply to the European Commission to provide an assessment of the conformity of the new Hungarian-Russian gas agreement with European energy legislation.

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RUSSIA READY TO CONTINUE GAS TRANSIT THROUGH UKRAINE

Russia has no intention of halting gas transit through the territory of Ukraine following the launch of the Nord Stream 2 pipeline, Russian Foreign Ministry spokesperson Maria Zakharova said on Thursday.
However, this issue depends on the volumes of future European procurement and the competitiveness of alternative routes, Zakharova said.
“We are ready to continue gas transit through the territory of Ukraine, but this issue is purely a commercial one,” Zakharova told a press briefing in Moscow.
It “depends on many factors, including the volumes of future European procurement and the competitiveness of alternative routes,” she said.
Besides, speaking about attempts to link the start of the normal operation of Nord Stream 2 to “other subjects,” Zakharova said Moscow “continues to regard them as an example of absolutely illegitimate politicization of energy cooperation, which radically contradicts market principles.”

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PRICE OF GAS IMPORTED TO UKRAINE GROWS BY 20%

Natural gas to the territory of Ukraine in August 2021 was imported at an average price of $427.88 (UAH 11,457) per 1,000 cubic meters, the Ministry of Economy reported on Monday.
Thus, the price of gas imported in the past month was 19.7% higher than the price of July 2021 in U.S. dollars, when it stood at $357.32 (UAH 9,747) per 1,000 cubic meters.

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GAS PRICE IN EU TOPS $600/THOUSAND CUBIC M

The price of the nearest futures contract on the Dutch TTF spot index for ICE Futures, for October, continued to grow on Monday, assuming the value of 49.26 euros per kWh or $600 per thousand cubic meters, according to the exchange’s data.
Trading on Friday finished up at the value of $586 per thousand cubic meters.
The new gas year begins from October. Gazprom has a long-term reservation of transit capacities through the Yamal-Europe gas pipeline until the end of September. The Russian company did not book capacities of the pipeline at past annual and quarterly auctions.
The launch of the almost completed Nord Stream 2 gas pipeline is expected toward the end of this year. Issues concerning regulation of the pipeline’s operation are currently under consideration of the relevant controlling bodies.

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DISCONTINUING GAS TRANSIT ACROSS UKRAINE WOULD DAMAGE HUNGARY

Hungary is interested in the continuation of natural gas transit across Ukraine, Hungarian Foreign Minister Peter Szijjarto said.
“I don’t understand why not ship gas via the southeastern route [after the launch of the Nord Stream 2 gas pipeline]. Hungary views this matter from a strategic standpoint, because the absence of transit across Ukraine would cause damage to our country,” Szijjarto said at a press conference following negotiations with Russian Foreign Minister Sergei Lavrov.
Each country should make decisions on sources and routes of energy supply primarily based on its own national interests,” he said.

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GERMAN CHANCELLOR MERKEL: WE WANT TO PROLONG AGREEMENT ON GAS TRANSIT FROM RUSSIA THROUGH UKRAINE SOON

Germany wants the agreement on the transit of Russian gas through Ukraine to be prolonged as soon as possible, German Chancellor Angela Merkel said.
“Our cooperation in the sphere of energy is very important. It already exists, but it will continue, also because there will be further traffic through the Ukrainian gas transport system from Russia to Europe. I have spoken about that with the Russian president [during the visit to Moscow on August 20] that we want to prolong the agreement, which is in effect until 2024, as soon as possible. We will also speak about that in Europe and with the companies that are associated with that here,” Merkel said at a press conference with Ukrainian President Volodymyr Zelensky in Kyiv on Sunday.
Germany will also have its own special envoy on transit issues, Merkel said.
“We agree with the Americans that gas cannot be used as a weapon. And therefore, we will be holding these talks with the Americans,” Merkel said.
“It has to be said that Nord Stream 2 is not a German-Russian project, there are companies from Germany, the Netherlands, and France there. And therefore it’s a European-Russian project, it is subject to European law, it is subject to the law of the Third Energy Package because we are not fully free in regulation, but should cite exactly that, therefore we didn’t hold these talks from the German side, but we supported that on the European side,” she said.
Merkel said Ukraine needs to develop in the direction of climate neutrality.
“We will export gas from Russia to Europe after 2024, and it’s important here that Ukraine should stay a transit country, and it’s important that this agreement should stay, and then step by step – it’s very important to Russia – Ukraine should also develop in the direction of climate neutrality. Germany should achieve that by 2045. That is why gas consumption will decrease, and then gas will not go on Nord Stream or via Ukraine’s gas transport system, and then Ukraine should be ready for what can be done then,” Merkel said.
One of the possibilities is partnership in the sphere of green energy, namely on hydrogen, she said.
“But it’s not a problem that can replace transit via the Ukrainian gas transport system from 2024. However, due to the renewable sources of energy, which can be expanded in Ukraine, it is possible to help here to produce green hydrogen by means of hydrolysis, by means of green energy from renewable sources of energy and use it,” the chancellor said.

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