Ukraine to increase gas imports from Russia, top private importer says

Dmytro Firtash, the owner of Ukraine’s second-biggest gas importer Ostchem, stated on September 12 that the Ukrainian government found a compromise with Gazprom that will enable it to increase its gas stockpiles in the coming weeks, as well as the transit of Russian gas through Ukraine to the EU. He expects Ukraine will accumulate 20-21 bcm of natural gas by the end of October, including 6-6.5 bcm of gas imported by Ostchem and up to 7 bcm of internally produced gas. He also hinted on some agreement that the Ukrainian government reached with Russian side that will enable Ukraine to avoid immediate cash payment for gas. He did not specify details of the deal.

Alexander Paraschiy: The gas accumulation plans provided by Firtash are at least by 6 bcm higher than what Ukraine’s Energy Minister planned earlier (about 14 bcm till mid-October, see our August 20 news). This revised plan assumes USD 2.4 bln of additional gas imports in the coming weeks. If the government indeed was able to reach some agreement with the Russian side to postpone payments for this gas, that will clearly decrease the pressure on the Ukrainian hryvnia. Enormous gas import needs in the coming months are a key factor threatening the local currency’s stability.

While Firtash’s statement presumes the devaluation pressure on the hryvnia could ease, we still have no proof of any agreement with Russia, and we are wondering what the Ukrainian government had to promise to reach it.