2019
August began with a rise in natural gas prices. The main reason was the increase in quotations on European hubs. At the beginning of the month, gas prices in Ukraine ranged from 5,450 – 5,700 UAH/thousand cubic meters depending on the resource, which is 200 – 400 UAH/thousand cubic meters higher than at the end of July.
However, starting from August 3, due to low demand and quotations in Europe, gas prices in Ukraine were declining until the end of the first ten days of August. As of August 8, prices stood at 5,350 – 5,450 UAH/thousand cubic meters.
With the start of the second ten days of August, prices rose again to 5,500 – 5,700 UAH/thousand cubic meters, after which a downward trend in gas prices was observed on the market until the end of the month. Quotations on European hubs remain the main price-setting factor on the Ukrainian market.
At the beginning of August, European markets saw a sharp rise in natural gas prices to €9.5 – 12.5/MWh. The main reasons for the rise in gas prices in Europe are preparations for scheduled technical inspections at most European production companies in August, which will lead to a decrease in gas production and thus reduce supply volumes on the market. In addition, import supplies from Norway, the United Kingdom and the Netherlands showed a slight decline. Due to general nervousness on the market as the heating season approaches, even minor changes lead to sharp price fluctuations on the hubs.
Throughout the month, gas prices in Europe were volatile and ranged from €9.5 – 10.8/MWh, but the general downward trend persisted. At the end of August, prices collapsed sharply to €9.3 – 10.1/MWh.
Exchange trading in natural gas in Ukraine reached a new record in August. This is mainly due to daily trading by «Naftogaz Trading». In total, 86.95 million cubic meters of gas worth a total of 474.1 million UAH (incl. VAT) were sold during the reporting month.
For the second month in a row, «Naftogaz Trading» remains the record holder in gas sales, having sold 34.15 million cubic meters of the August resource for a total of 185 million UAH (incl. VAT) and 34.7 million cubic meters of the September resource for 188.8 million UAH (incl. VAT).
In second place is «Investservis», which sold 1.5 million cubic meters of the September resource for a total of 8.44 million cubic meters; the weighted average selling price of gas was 5,630 UAH/thousand cubic meters on post-payment terms.
«Poltava Gas and Oil Company» sold 600 thousand cubic meters of the August resource for a total of 3.3 million UAH (incl. VAT). «Kraft Energy» sold 400 thousand cubic meters of the August resource for 2.25 million UAH (incl. VAT). Also, «Smart Energy» debuted on the UEEX, selling 100 thousand cubic meters of the September resource.
In addition, during August «RGK Trading» purchased 9.75 million cubic meters of the September resource and 200 thousand cubic meters of the August resource on the UEEX commodity exchange. Also, «Ukravtogaz» bought 3.5 million cubic meters of the September resource at a starting price of 5,300 UAH/thousand cubic meters on ten-day payment terms. «Ukrspyrt» bought 2.05 million cubic meters of the September resource at 5,459 UAH/thousand cubic meters on ten-day payment terms.
In addition, in August Geo-Alliance held gas sales auctions on the Smarttender trading platform.
Price offers of NJSC «Naftogaz of Ukraine» for industrial consumers not covered by the PSO for August amounted to 5,568 UAH/thousand cubic meters on prepayment terms and 6,244.8 UAH/thousand cubic meters on other payment terms, which is about 500 UAH lower than prices in July. At the end of August, «Naftogaz» published its offers for September, in which the company kept price offers stable.
Gas imports from European directions continue to grow. In August, 2.01 billion cubic meters of gas were imported, which is 600 million cubic meters more than in July 2019. The average daily gas import reached a record 65 million cubic meters.
During August, 2.4 billion cubic meters of gas were injected into Ukrainian UGS facilities, which is 100 million cubic meters more than in July 2019. At the end of the month, 18.25 billion cubic meters of gas were stored in Ukrainian UGS facilities.
Gas consumption in Ukraine during August 2019 amounted to 1.3 billion cubic meters, which is 45 million cubic meters less than in July. The average daily gas consumption in August was 42 million cubic meters.
On August 1, the new Information Platform of the Gas Storage Operator was launched. To inject/withdraw gas into/from UGS facilities, a storage services customer must simultaneously submit two separate nominations/renominations for the same volume of gas: one to the Gas Storage Operator Platform, the other to the GTS Operator Platform. Also, administration of the transfer of natural gas stored in gas storage facilities is carried out only on the basis of trade notifications uploaded to the Gas Storage Operator Platform.
According to UTG, the Information Platform of the Gas Storage Operator successfully started operation. As of 07:00 on August 1, the first 40 nominations, 19 renominations and 6 trade notifications for the gas day of August 1 were successfully accepted. In total, the platform already has 446 users from 264 companies.
Also, from August 1, new tariffs for gas injection into and withdrawal from UGS facilities came into effect:
- for natural gas injection services into UGS facilities – 93.30 UAH/thousand cubic meters per day (excl. VAT), the tariff increased by 45% or by 28.9 UAH/thousand cubic meters;
- for natural gas withdrawal services from UGS facilities – 97.20 UAH/thousand cubic meters per day (excl. VAT), the tariff increased by 45% or by 30.1 UAH/thousand cubic meters;
- for natural gas storage services in UGS facilities – 0.1720 UAH/thousand cubic meters per day (excl. VAT), the tariff remained stable.
The estimated marginal prices of «Ukrtransgaz» for August 2019, used to calculate financial security, are:
- marginal purchase price of natural gas – 7,350.79 UAH/thousand cubic meters (incl. VAT);
- marginal selling price of natural gas – 6,014.28 UAH/thousand cubic meters (incl. VAT).
The natural gas purchase price formed during August 2019 is 5,002.31 UAH, which is about 1,650 UAH/thousand cubic meters lower than the price in July. The estimated marginal prices for September 2019, used to calculate financial security, are:
- marginal purchase price of natural gas – 5,502.54 UAH/thousand cubic meters (incl. VAT);
- marginal selling price of natural gas – 4,502.08 UAH/thousand cubic meters (incl. VAT).
