Press-release of the Embassy of Ukraine in the Republic of Macedonia on the situation with gas supplies and transit
On 1 March, 2018 PJSC Gazprom refused to supply already prepaid gas volumes to Ukraine.
The situation resulted in additional load on the Ukrainian gas transmission system and created significant technical risk for its operation.
Following this, Naftogaz and the Ukrainian authorities were confronted with a crisis situation and have been implementing a number of steps.
The total daily demand in Ukraine currently stands at approximately 200 mcm. Of this demand, the majority (over 100 mcm) is covered by gas withdrawn from the underground storages. The storages are operated next to their maximum capacity at given the current balance of stored gas. Nearly a third of the daily demand is covered by the local gas production.
Naftogaz and other companies are importing gas from the EU to balance the gas needs.
On 1 March Naftogaz had to urgently find and contract approximately 18 mcm of gas per day to replace volumes expected from Gazprom.
Given Gazprom's last-minute rejection to supply prepaid gas and the fact that they have announced this decision publicly, Naftogaz faced a sharp hike in the prices.
The current cold spell in both Ukraine and the EU makes gas supplies in the coming few days extremely scarce, which has an aggravating effect on the cost of the available gas.
Ukraine has introduced the plan of extraordinary Security of Supply measures developed jointly with the US government experts in 2015.
The plan involves industrial consumers, public sector and heat producers and is aimed at reducing the daily gas demand.
On request of the Ukrainian authorities, Naftogaz has addressed the public with a request to voluntarily lower the temperature in their home by 1-2 degrees Celsius during the upcoming three days to ensure resilience against any further potential misconduct from Gazprom.
Given the emergency of the situation Naftogaz and Poland’s PGNiG have signed a contract for urgent gas supplies. The contract with PGNiG is effective until the end of March 2018. The contracted volume totals over 60 mcm. Gas deliveries from Poland will allow lifting the extraordinary measures in the nearest future.
In view of the above, Ukraine has requested the European Commission:
- to facilitate immediate trilateral consultations in Ukraine-EU-Russia format;
- to trigger Early warning mechanism as foreseen by article 340 of the Ukraine-EU Association Agreement.
Moreover, on 2 March 2018 PJSC Gazprom announced its decision to withdraw from the contracts signed in 2009.
It’s clear that Gazprom again uses gas as a political tool aimed at undermining the security of gas supply to Europe, which is especially cynic at times of current low temperatures in Ukraine and across the EU.
This is also a clear abuse of Gazprom’s dominant market position.
Ukrainian Government and Naftogaz will do their utmost to implement the current contracts and decisions by the Tribunal in good faith and will also use all available tools and remedies to make Gazprom respect its legal obligations and compensate for the damage caused by this violation.
Ukraine is and will remain a reliable energy partner for Europe.