Ukraine confirms plans to import 35 bcm of gas in 2012

Ukraine’s government reiterated that Ukraine will import 35 bcm of natural gas in 2012, including 27 bcm to be purchased by state monopoly Naftogaz and 8 bcm by private Ostchem Holding Limited, according to Energy Minister Yuriy Boyko (via Interfax). Ukraine is also expected to produce 21 bcm of gas domestically and use 8 bcm leftover from previous periods. Meanwhile, Gazprom officials said yesterday the company plans to supply 40 bcm of gas to Ukraine this year. Additionally, Gazprom said it was not in talks with Ukraine on a gas price discount.

Vitaliy Vavryshchuk: The figures released by the Ukrainian government official are broadly in line with numbers announced at the beginning of the year (27.4 bcm was expected to be  purchased by Naftogaz and 6.3 bcm by Ostchem). The announced figure of 35 bcm for prospective gas imports is only 1.3 bcm above the previous number and does not change our projection of Ukraine’s 2012 current account deficit of USD 10.9 bln. We think Ukraine will stick with its current plans and will not buy another 5 bcm of gas (for a total cost of above USD 2.1 bln), as expected Gazprom, to prevent further deterioration of external accounts in 2012.