Ukraine’s gas sector overhaul

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Ukraine’s gas sector overhaul

Ukraine Gas

On 1 October 2015, Ukraine’s new natural gas law entered into force, with the country’s market set to radically change.

Ukraine is important for security of Russian gas supplies to Europe but it also has the potential to become a traded hub.

With the start of the gas winter fullness of Ukraine’s storage sites located on the EU border comes to the fore to secure Ukraine’s own supply and transit of Russian gas to Europe. Ukraine has the option to prepay gas from Russia or import gas from Europe in reverse flow, but it struggles to raise money from international instructions to finance the gas purchases.

Talks with Russia continue regarding future gas supplies to Ukraine, the price of gas and gas transit to Europe.


Gas regulation and law:

On 9 April 2015, Ukraine’s parliament approved sweeping reforms to the country’s natural gas market an English version of which can be found here.

  1. The law – an English version of which can be found on here – was signed off by Ukraine’s president Petro Poroshenko on 5 May 2015 and entered into force on 8 May 2015. Most of legislation covered by the new law is scheduled to take effect from 1 October 2015 but it remains unclear how quickly it will be implemented in full. Ukraine’s natural gas market is to be liberalised and its new structure will conform to the rules laid out in the EU’s third energy package. This will mean the state-owned supplier Naftogaz will be operationally and legally separated from Ukrtransgaz, which runs the transmission system and the country’s fleet of storage units...
  2. 2. Ukraine is working on a gas network code following the adoption of the new gas law on 25 April designed to create a natural gas market in line with European rules. Regulator NERC published a draft network code on 30 April outlining a transition to an entry-exit tariff system.

Related Resources from ICIS Energy

Whitepaper

Ukraine Whitepaper

ICIS has been proud to provide in-depth coverage of developments in Ukraine in its flagship gas reports – daily ESGM and fortnightly EGM. The ICIS Ukraine coverage helps our readers to understand the complexities of the Russia-Ukraine relations by providing wider context and analysing possible implications for Europe.

Summary of development of the Ukrainian gas sector since the beginning of the latest Russia-Ukraine crisis can be found in this whitepaper

Find out more »

Video

Ukraine may face an uphill battle to fill up its winter gas storage facilities by the beginning of October if the country does not continue injections at maximum capacity throughout the rest of August and September, according to ICIS analysis (see ESGM 14 August 2015).

As a result, low storage levels during winter could threaten the integrity of Russian gas transit flows via Ukraine to Europe.

In this ICIS update, Editor Katya Zapletnyuk and reporter Marcello Kolax discuss the situation and the different options Ukraine has to ensure it has sufficient supplies by the start of winter.


Events

ICIS presents at the Second Ukrainian Gas Forum in Kiev ICIS presents at the Second Ukrainian Gas Forum in Kiev

Ukraine’s gas sector reforms leading to creation of a traded gas hub were discussed by more than 200 delegates who attended the Second Ukrainian Gas Forum in Kiev on 12-13 October. To find out more about the forum follow this link

News

Short-haul Ukrainian tariff may be introduced in January
Ukrainian grid operator Uktransgaz hopes to introduce a short-haul transmission... read more »

Romania, Bulgaria, Ukraine to test gas flows by end of 2016
Gas flows between Ukraine, Romania and Bulgaria will be tested by the end... read more »

Ukraine introduces single price for residential consumers
The Ukrainian government on 27 April approved a single natural gas price for residential consumers... read more »

Ukraine seeks to increase foreign interest in gas storage
Ukrainian-registered affiliates of foreign gas suppliers currently have the right to store gas on Ukrainian territory... read more »

Ukrainian exchange brokers trade for foreign suppliers
International energy companies have started to use the Ukraine’s Universal Interbank Commodity Exchange (UICE) to sell gas to Ukrainian industrial consumers, a UICE spokesman told ICIS on Monday... read more »

Austrian trader in gas swap with Ukrainian fertiliser producer
Ukrainian fertiliser producer Odessa Port Plant (OPZ) has signed a gas-for-fertilizers deal – tolling agreement – with Austria-based trader Antra... read more »

Ukrainian independent firms start importing EU gas
Several Ukrainian independent traders are importing gas into Ukraine from Slovakia, Poland and Hungary, the Association of Gas Traders of Ukraine told ICIS... read more »


Podcast

Why has gas liquidity increased in Slovakia? Listen to the latest ICIS podcasts on gas sector developments in Ukraine:

Liquidity growth at the Slovakian virtual natural gas hub has been driven by recent developments in Ukraine. ICIS editors Katya Zapletnyuk and Tom Marzec-Manser discuss the reasons for launch of the ICIS daily Slovak price assessment.

ICIS ESGM methodology in Russian

ICIS ESGM Methodology

European Spot Gas Markets (ESGM) contains independent price assessments and indices for mature and emerging gas markets, as well as in-depth analysis on price drivers, authoritative commentary on each day’s trading activity and daily news.

Coverage for some markets stretches back as far as 1994 and a comprehensive price history database is available for this report.

The Russian-language version of the ESGM methodology is available here.

This is a curtesy translation. You can find the official English version of the methodology here.