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EXPRO Gas&Oil Weekly Weekly Digest Gas&Oil №26 (112) JUNE 25- JULY 01.2018 WEEKLY REVIEW Digest news tracts for 7 booster compressor stations fore hundreds of the cities and millions of (BCS) with Karpatygaz till April 30, 2019. consumers will remain without heating Last week, Ukrtransgaz announced 12 And this is despite the trial initiated by and water supply. The Association of the tenders for the purchase of gas for indus- Ukrgasvydobuvannya in the Stockholm Gas Market of Ukraine asks the Prime trial and process needs and balancing of Arbitration. We remind that Ukrgasvy- Minister to assist in resolving the issue of the total volume of 2.437 billion cubic me- dobuvannya seeks to terminate the joint the gas imbalances debts. The big interest ters and the total expected value of UAH activity with Karpatygaz (a subsidiary of and no less skepticism among the market 21.2 billion. It was noted that the final cost the Swedish Misen). participants has caused Naftogaz's desire of the gas to be paid will be determined The big resonance in the market was to enter the private gas purchase mar- accounting the quotations on the German caused by an aggravation of the gas dis- ket in Ukraine. Initially in June, Naftogaz gas hub NetConnect Germany (NCG) dur- tribution networks’ operators on the one has announced a test purchase of gas at ing the period of fuel delivery. hand and Naftogaz and Ukrtransgaz on a price of UAH 6,900 per thousand cubic In addition, Ukrtransgaz announced a ten- the other. According to Ukrtransgaz, cur- meters (excluding VAT). This is about UAH der with an expected value of UAH 2.5 bil- rently the debt for gas balancing services 1000 less than the market price. Obvious- lion for the reconstruction of the Yahotin increased to UAH 25.56 billion. The com- ly, those who were willing to sell gas were compressor station. The completion of the pany filed 35 law suits for a total amount not found. Moreover, there are no issues procedure and signing of the agreement of about UAH 15.1 billion on recovery of with gas sales on the market. Now in July with the successful bidder is scheduled by the arrears. On the other hand, the net- Naftogaz offers UAH 7,629 per thousand October 1, 2018. An important criterion is work operators insist that the debt was cubic meters (excluding VAT). However, that the coefficient of efficiency, primar- artificially inflated due to the introduction such a price remains UAH 250 lower the ily the level of gas consumption, will be of the coefficients by Ukrtransgaz. Due market one. Moreover, already in July, the considered. Among other infrastructure to artificially created debts, most of the recovery in the market for gas purchases news, it should be noted that Ukrgasvy- enterprises of the district heating enter- from industrial enterprises is expected, so dobuvannya has extended the lease con- prises actually became bankrupt. There- there will be less free gas on the market. Dynamics of Brent crude quotes Natural gas price, CEGH, 2017-2018, (ICE Index), 2017-2018, $/bar. €/MWh Natural Gas Prices at the European Habs and at the Ukrainian Border, Day Ahead Market (€/MWh) Delivery date 25-Jun 26-Jun 27-Jun 28-Jun 29-Jun GPL 22.02 21.86 21.84 22.15 22.34 NCG 21.88 21.67 21.58 22.01 22.07 TTF 21.84 21.65 21.53 21.94 22.01 CEGH 22.43 22.14 22.10 22.62 22.72 Price at the border (in the Ukrainian GTS), 9273.14 9214.82 9152.51 9318.09 9345.71 UAH * - at the calculation of the imported gas price in Ukrainian GTS quotes for gas at the European hubs, the average cost of transportation to the border of Ukraine, the cost of entry into the Ukrainian gas transportation system, the official exchange rates and value-added tax (VAT) are accounted. Copyright © 2018 Exploration & Production Ltd 1 Exploration & Production Weekly Digest JUNE 25- JULY 01.2018 PUBLIC COMPANIES Naftogaz increases the with the help of BCS during the entire ing the arguments provided by Naftogaz, price of gas supply on the term of the lease is the property of Ukr- the court dismissed Gazprom's unjusti- gasvydobuvannya. fied claim that the administrative secre- domestic market in July Earlier, the state company noted that the tary had allegedly written significant parts Naftogaz of Ukraine NJSC plans to pur- signing of lease agreements for BCS did of the justification of the transit decision. chase domestic natural gas from Ukrain- not in any way affected the trial initiated However, the court retained a temporary ian private gas producers in July this year by Ukrgasvydobuvannya at the Arbitra- suspension of executive actions on Naf- at a price of UAH 7,629.00 per thousand tion Institute of the Stockholm Chamber togaz's monetary claims for other rea- cubic meters (excluding VAT). of Commerce regarding the termination sons. Today, the company was not in a In June, Naftogaz announced a test pur- of the joint operation with Karpatygaz and position to give its counterarguments to chase of gas at a price of UAH 6,900.00 Misen Enterprises AB (Sweden). these reasons. Naftogaz plans to file an per thousand cubic meters (excluding additional appeal to the court with these VAT). Even though June is traditionally Ukrtransgaz has facts and hopes for reconsidering of the a low season of gas demand, Naftogaz latest decision. did not receive any offers from gas sup- announced tenders for The current decision is not binding on pliers at the proposed price. Therefore, the purchase of gas at courts of other jurisdictions. According- the company has increased the proposed an expected cost of UAH ly, Naftogaz will continue its actions to price for July. recover Gazprom's debt in other jurisdic- Reference: According to the Resolution 21.2 billion tions. No. 187 of the Cabinet of Ministers of On June 22-23, Ukrtransgaz PJSC an- Ukraine of March 22, 2017 “On Approv- nounced 12 tenders for the purchase of Ukrgasvydobuvannya al of the Provision on the Imposition of gas for production, process and balancing Special Duties on the Natural Gas Market needs of a total volume of 2,437 billion paid UAH 98.5 million to Subjects for Provision of General Public cubic meters and an overall expected val- local budgets in May 2018 Interests in the Process of Operation of ue of UAH 21,202 million (excluding VAT). the Natural Gas Market”, the price of gas Bids submission is open until July 23- Ukrgasvydobuvannya PJSC for May 2018 for the needs of the population is UAH 24 (depending on the lot); auctions are paid UAH 98.5 million in rent to local 4,942 per 1000 cubic meters without VAT. scheduled for August 28-29. budgets of the territories in which the The final cost of gas to be paid by Ukrtran- company carries out hydrocarbons’ pro- Ukrgasvydobuvannya shaz to the winners of the tenders will be duction. determined by quotes on the German gas 5% of rent for May 2018 came to the local extended the lease of hub Net Connect Germany (NCG) during budgets at different levels in 11 regions. CBS to Karpatygas for a the period of fuel delivery. Most of these funds concentrated in two year gas extraction regions: Kharkiv and Pol- The Swedish court of tava. Ukrgasvydobuvannya PJSC has extend- Thus, in May 2018, local budgets of vari- ed the lease contracts for seven booster appeals found statements ous levels in the Kharkiv region received compressor stations (CBS) with Kar- of Gazprom unjustified UAH 50.25 million, in Poltava region – patygaz till April 30, 2019, the statement UAH 40.7 million, in Lviv – UAH 3.15 mil- of Misen Enterprises, which owns Kar- The County Court of Sway, Sweden, today lion, and in Dnipropetrovsk – UAH 2.77 patygaz, reads. decided to reconsider its previous deci- million. These are Khrestyshchenska, Yuliivska sion to suspend enforcement of the de- The remaining UAH 1.63 million of rent for (both - Kharkiv oblast), East Poltavska, cision of the Stockholm Arbitration under May 2018 was paid to Ivano-Frankivsk, Rozpashnivska, Abazivska (all - Poltava a transit contract between Naftogaz and Luhansk, Sumy, Volyn, Chernivtsi, Tran- region), Letnyanska and Svydnytska BCS Gazprom. Today's Gazprom’s statement scarpathian and Donetsk regions. (both in Lviv region). regarding the court leaving its previous In January-May 2018 Ukrgasvydobuvan- The lease agreements assume that the decision unchanged is not true. nya directed UAH 481.07 million of rent to entire volume of hydrocarbons obtained Today's decision means that after study- the local budgets. Copyright © 2018 Exploration & Production Ltd 2 Exploration & Production Weekly Digest JUNE 25- JULY 01.2018 PRIVATE COMPANIES Ukrnaftoburinnya set a in Ukraine by May results. CEO of Burisma dozens of gas fields in Ukraine to new record for daily gas rate Group announced it, forecasting the annu- subsidiaries. It is reported by Econom- al output of oil and condensate at the level ichna Pravda (EP). The company Ukrnaftoburinnya success- of more than 100 thousand tons. In 2017, Golden Derrick Company has re- fully completed the well #20, resulting in “At the beginning of the year, we commis- newed a dozen licenses for oil and gas in a daily rate in the Sakhalin field reaching sioned well #2 in the South Boryslavska the Poltava region. Now Fuks transfers a record mark exceeding 2 million cubic area, receiving good oil rates. We also these special permits to affiliated struc- meters of natural gas, the company re- have a 250% increase in the production of tures in order to prevent the return of the ports.
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