Naftogaz average gas price falls in Q2

The price of all natural gas imported by Ukrainian incumbent Naftogaz in Q2 ‘15 slid 15% quarter on quarter to $268/thousand cubic metres (kcm) – equivalent to €22.937/MWh, data from the company shows.

Naftogaz paid on average $275/kcm for European-sourced gas in Q2 including transport, $26/kcm less than in the previous quarter. Excluding transport, the price averaged at $267/kcm.

In comparison, Russia’s Gazprom was charging Naftogaz $248/kcm during Q2, making it more advantageous for the Ukrainian incumbent to buy from its Russian peer rather than via Europe’s hubs.

Without transport costs, the highest European price paid by Naftogaz over the quarter was $279/kcm in May. The April high price was $276/kcm, while in June the price was $278/kcm.

Gas sourced from the EU and delivered to Ukraine is often priced at the central European hubs.

At the Austrian VTP, the Heren monthly index for April ’15 delivery out-turned at €22.412/MWh, while for May ’15 it was €21.715/MWh. The June ’15 Heren index for Austria was €21.189/MWh.

Ukraine imported 2.68 billion cubic metres (bcm) of gas from Europe in Q2. This is a drop from 3.57bcm in the previous quarter.

Slovakia is currently Ukraine’s only source of gas imports. Poland suspended its exports to Ukraine on 1 May and Hungary stopped its deliveries on 1 July.

Imports from Russia were at 1.59bcm, 26% less than in the previous quarter.

Ukraine halted gas purchases from Russia’s Gazprom on 1 July after Russia, Ukraine and the European Commission failed to reach an agreement on gas flows between the two countries.

The European Bank for Reconstruction and Development is currently considering a $300m trade finance loan to Naftogaz so that it can finance gas purchase. ekaterina.kravtsova@icis.com