Ukraine accumulates 17 bcm of gas as of end-September
11 October 2013
The natural gas balance in Ukraine’s underground storage facilities (USF) amounted to 17 bcm as of October 1, Naftogaz of Ukraine (NAFTO) reported on October 10. The gas balance amounted to 12.2 bcm a month before, according to an earlier statement of Energy Minister Eduard Stavytskiy.
Alexander Paraschiy: The increase in gas stockpiles by 4.8 bcm in September implies that last month Ukraine imported at least 5.0 bcm of gas (+75% m/m) for at least USD 2.0 bln (+80% m/m). We wonder how that amount will affect Ukraine’s current account and NBU reserves in October (as Ukraine is paying for that gas this month).
Meanwhile, we see the pressure of October’s gas imports on Ukraine’s current account can decrease significantly considering Gazprom reportedly agreed to provide 5 bcm to private Ostchem for just USD 260/tcm. Most likely, Ostchem will pay for this gas from its offshore accounts (or it may even receive the gas for deferred payments), which will minimize hard currency outflows from Ukraine in November. In turn, Naftogaz is likely to decrease significantly gas purchases in October. A discouraging consequence of activated gas imports by private Ostchem is an expected decline in gas imports by Naftogaz, which will lead to an increase of its penalty from Gazprom – for breaching its take-or-pay clause – to over USD 11 bln this year from USD 7 bln in 2012.
