In 2017, Ukraine covered its gas import requirements with supplies from the European market. Compared to 2016, gas imports increased by 27% from 11.1 bcm to 14.1 bcm.
In 2017, 67 companies imported gas to Ukraine (34 companies in 2016).
Private traders and gas consumers increased both volume and share of gas imports last year, almost doubling their imports compared with 2016 from 2.9 bcm to 5.4 bcm.
In 2017, Naftogaz imported 8.7 bcm of gas from the European market, which is 0.5 bcm (6%) more than in the previous year. Naftogaz purchased gas from 13 European suppliers in 2017 (15 companies in 2016). None of them accounted for more than 30% of gas imported by Naftogaz.
The liberalization of the wholesale market in Ukraine is taking place following the adoption of the Law “On the natural gas market” (effective since 1 October 2015) and other steps towards the establishment of an open and transparent gas market in Ukraine.
For over two years, Naftogaz has not been buying gas from Gazprom, following the Russian company’s refusal to extend “the winter package” in 2016. According to “the winter package”, Gazprom was to suspend its “take-or-pay” claims and payment demands for alleged gas supplies to the occupied regions in eastern Ukraine until the anticipated Stockholm arbitration verdict. With this agreement in place, Naftogaz was able to consider Gazprom among potential suppliers. By not signing “the winter package”, Gazprom preserved its claims for gas not purchased by Naftogaz thus making its price offer irrelevant.
In December 2017, the Stockholm arbitration tribunal rejected all of Gazprom’s claims regarding gas that had not been supplied to Naftogaz. The arbitrators dismissed the “take-or-pay” claims of the Russian company and confirmed that Naftogaz should not pay for alleged supplies to uncontrolled areas of Donetsk and Luhansk regions. The tribunal also obliged the Russian monopoly to sell 5 bcm of gas per year to Naftogaz at the price of a liquid European hub. The price is lower than the current price available to Ukrainian companies at the country’s western border. By the same ruling, Naftogaz is obligated to buy 4 bcm per year, which is less than a half of the company’s expected gas import needs. The company can cover the rest of its needs by purchasing from suppliers that offer the most competitive terms.
Natural gas imports to Ukraine in 2016-2017, bcm
Naftogaz gas imports to Ukraine by entry points
*less than 0.1 bcm of imports over the period
Note: Figures may not add up exactly due to rounding.
Corporate Communications Department
NJSC Naftogaz of Ukraine