In order to overcome the gas shortage in the upcoming winter, NJSC Naftogaz of Ukraine will receive 48 billion hryvnia ($ 1.8 billion) from the operator of the country’s gas transmission system (GTS) for the purchase of fuel, Ekonomicheskaya Pravda, an Ukrainian outlet reported.
The outlet noted that one of the challenges for the new management of “Naftogaz” is the passage of the heating season in conditions of a shortage of four billion cubic meters of gas: instead of 19 billion required for this, Ukraine has only 15.
At current spot gas prices, the purchase of such a volume will cost Ukraine more than 120 billion hryvnia (about $ 4.5 billion), the article said. And more, as the prices are currently still rising.
“But even if quotations are reduced by several times, Naftogaz will need tens of billions of hryvnias for the missing four billion cubic meters,” the outlet reported.
The solution to this problem was the decree of the Ukrainian government, according to which the operator of the country’s gas transportation system will pay “Naftogaz” compensation for the loss of control over the gas transportation system as a result of the unbundling carried out last year (division – editor’s note).
According to sources of the publication, the total amount of compensation will be 51 billion hryvnia, the main part in the amount of 48 billion will be paid by the “Operator of GTS of Ukraine”. Until recently, it was planned that the GTS operator would pay this amount in equal installments of UAH 9.6 billion over five years, but now the concept provides for the entire amount to be paid by the end of the year.
“Of this amount, only 30 billion hryvnias are on the Operator’s accounts. The Operator is likely to lend the missing 18 billion,” a source at Naftogaz told EP. At the same time, the “Operator of GTS Ukraine”, as the newspaper notes, is “not happy” about the planned emergency payment.
“Why force“ Operator ”to give all its money at once, and even drive it on credit? Because“ Naftogaz ”has nothing to buy the volumes of gas necessary for the heating season, which the company does not hesitate to talk about publicly,” the outlet explained.
Last year, Ukraine switched to European rules for managing the gas transportation system – a separate operator company was created to manage the GTS (“GTS Operator of Ukraine”). After the adoption of the relevant law, its separation (unbundling) from Naftogaz began, the procedure was completed in January 2020.
Since 2015, Kiev has not been buying Russian gas directly, but actually buys it from Europe. Since the beginning of September 2020, Ukraine has completely switched to buying gas from Russia using a virtual reverse, and about half of the transit volumes now immediately remain on the territory of Ukraine.
Until 2020, this was hampered by a transit contract with Gazprom: Ukraine pledged to accept gas at the border with Russia and transfer it back to Gazprom Export at the border with Europe. Therefore, Kiev used a physical reverse from the EU, which led to an increase in the price of blue fuel.
At the same time, Naftogaz Ukraine stated that direct gas imports from Russia would jeopardize the country’s sovereignty.
As a result, these measures may seem adequate at first sight, but they’re actually entirely not enough and risk to simply put more depth on the taxpayers’ backs.
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