Gazprom books additional capacity for Ukraine gas transit in October: Naftogaz

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Highlights

Booking is on top of capacity under transit deal

Transit deal is for 178 million cu m/d in 2020

Gazprom to pay extra for additional Ukraine capacity

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London —
’s Gazprom has booked additional capacity to transport gas to Europe via Ukraine in October, on top of the volumes agreed under its five-year transit deal with Kyiv, Ukraine’s state-owned Naftogaz said late Sept. 21.

Under the deal signed on Dec. 30 last year, Gazprom agreed to transit 65 Bcm of gas via Ukraine in 2020 and 40 Bcm/year in 2021-24 under “ship-or-pay” terms.

Gazprom pays for transit on a flat basis, meaning payments for 178 million cu m/d, so any extra Ukrainian capacity Gazprom needs for any given date must be paid for.

In a statement, Naftogaz — which signed the long-term transit deal with Gazprom along with new state shipper GTSOU — said it received additional capacity bookings at interstate connections.

“Transit will be paid for by Gazprom in addition to the main transit agreement,” it said.

The capacity bookings were made during auctions that took place on the Hungarian RBP and Polish GSA platforms on Sept. 21. “This is the first such ,” Naftogaz said. No reference was made to the volumes booked by Gazprom for October.

Gazprom could not be reached for immediate comment Sept. 22.

Following the results of Naftogaz bidding, the capacities at the entry and exit points in Ukraine have been distributed, which will be used to provide additional volumes of Gazprom’s transit, Naftogaz said.

“All additional capacity ordered by Gazprom is additional money for Ukraine and its citizens,” Naftogaz deputy chairman Serhiy Pereloma said.

“The capacity of the Ukrainian gas system allows it to meet the demand of both Gazprom and other users for services for the of large volumes of gas,” he said.

Transit to August

Ukraine transited a total of 34.8 Bcm of gas under its five-year transit deal with Gazprom in the first eight months of 2020, representing 80% of the total booked capacity.

The total volume was also 42% down on the amount of Russian gas transited via Ukraine in the same period of 2019.

GTSOU said earlier this month that Gazprom had been paying the full amount for the entire volume of booked capacity despite only having used 80% in the period January-August.

The agreement for 65 Bcm of transit in 2020 is down on the volume of Russian gas transited by Ukraine in recent years of 87-94 Bcm/year and below its technical capacity of around 140 Bcm/year.

According to comments by former Naftogaz executive director Yuriy Vitrenko in February, Gazprom paid $175 million for transit in January and pre-paid $164 million for transit in the shorter month of February.

That assumes a daily transit cost of $5.65 million, meaning Gazprom is likely to have to pay $2.06 billion for Ukrainian transit under the five-year deal over the course of 2020, but will have to pay more for the additional capacity it booked for October.

Author

Stuart Elliott

Editor

Alisdair Bowles

Source: Platts

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