Naftogaz to cut gas imports 32% yoy in 2012

Naftogaz (NAFTO) plans to cut gas import volumes from 40 bcm planned for this year to 27 bcm in 2012, Ukraine’s Energy Minister said yesterday. He added that the Ukrainian economy would not be able to accommodate the USD 416 /tcm price the Ukrainian government expects from Gazprom for 2012 without cutting volumes and further replacing expensive gas with alternative energy. Vitaliy Vavryshchuk: The cut in gas import volumes is the only way for Ukraine to avoid a sharp deterioration in external accounts if the government fails to negotiate a substantial gas price break from Russia. In line with government plans, we assume Ukraine will import 33.7 bcm of gas in 2012 (incl. 27.4 bcm by Naftogaz and 6.3 bcm by Ostchem Holding) vs. 44.6 bcm (incl. 40 bcm by Naftogaz and 4.6 bcm by Ostchem Holding) expected in 2011, which implies the country’s gas bill remain largely unchanged for 2012 at USD 14.1 bln.