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Ukraine to reduce gas consumption in winter by 5 percent

August 28, 2013, 22:39 UTC+3

In 2014, Ukraine will buy no more than 18 billion cubic meters of Russian gas

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KIEV, August 28 (Itar-Tass) - The modernisation of Ukraine’s housing and utilities sector and introduction of energy efficient technologies will allow the country to reduce natural gas consumption by 5 percent in the 2013-2014 heating period, Minister for Regional Development and Construction Gennady Temnik said.

Last winter, Ukraine consumed about 8.5 billion cubic metres of gas but will cut this amount 5 percent this winter to about 8.1 billion cubic metres.

Energy and Coal Industry Minister Eduard Stavitsky said Kiev was engaged in negotiations with Moscow on gas supplies for Ukraine’s underground gas storage facilities. Naftogaz Ukrainy CEO Yevgeny Bakulin is in Moscow now for talks.

Stavitsky said Ukraine was studying the possibility of increasing the amount of gas pumped into its underground gas storage facilities. “We need 14 billion cubic metres of gas [for the coming heating period], but Russia insists on about 18-19 billion cubic metres. This is what we are negotiating,” the minister said.

Naftogaz Ukrainy will import 2-2.5 bcm of Russian natural gas in August, Stavitsky said, adding that “all the gas will go into the underground gas storage facilities.” Last month, Naftogaz Ukrainy planned to import about 1.5 bcm of Russian gas.

Earlier, Stavitsky said that about 14-16 bcm of gas would be in underground gas storage facilities by the start of the heating season in the country. “Fourteen billion cubic metres is the amount that allows us to ensure safe and smooth transportation of natural gas to Europe,” he said.

Ukraine is planning to import about 18 billion cbm of gas this year under the current contract with Gazprom and buy 8 bcm from Cypriot Ostchem Holding owned by Ukrainian businessman Dmitry Firtash.

Reverse supplies from Europe will give another 1.3 bcm of gas or so this year.

Stavitsky said Kiev had “already made progress” in reducing its dependence on Russian natural gas and will “launch a second line for diversification of supplies” shortly.

According to the minister, the price of natural gas in Europe starts “from 350 U.S. dollars per 1,000 cubic metres. Leading European traders’ projections range within 250-280 U.S. dollars in the second half of the year,” he said.

“This is why we hope to lower the average annual price of gas per 1,000 cubic metres,” he added.

The European Union has promised assistance to Ukraine in diversifying natural gas supplies.

“The European Union promised to help diversify natural gas supplies, which undoubtedly affects the price of gas bought from Russia,” Stavitsky said

Kiev is planning to buy about 290 million cubic metres of gas in Europe in reverse mode (about 140 million cubic metres will be delivered through Poland and the rest through Hungary).

Ukraine has been receiving natural in reverse flows from Europe since November 1, 2012. The gas is supplied across the Ukrainian border with Poland under a contract with from German RWE.

The gas is supplied across the Ukrainian border with Poland. RWE planned to supply up to 5 billion cubic metres of gas to Ukraine until May 2013. Last year Naftogaz Ukrainy imported 55 million cubic metres of gas using the reverse flow scheme.

The throughput capacity of Ukraine’s gas transportation system on the Western border is about 40 billion cubic metres.

In 2014, Ukraine will buy no more than 18 billion cubic meters of Russian gas. “The amount of Russian gas to be imported in 2014 may be about 18 billion cubic metres or even less,” Naftogaz Ukrainy CEO Bakulin said.

In 2013, Ukraine will buy 27.3 billion cubic metres of natural gas, including 18 billion cubic metres from Gazprom.


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