Gas in Ukraine is traded at a higher price than in Europe. How this will help imports
30 April 14:07
On April 29, natural gas prices in Ukraine exceeded spot prices for natural gas in Europe for the first time in almost a year. This was reported by the specialized publication ExPro Daily Gas, "Komersant Ukrainian" informs.
What is the ratio of gas prices in Ukraine and Europe?
According to ExPro Natural gas quotes, prices for the April resource (UA-VTP-CM) in Ukraine on Tuesday amounted to about 19,150 UAH/thousand cubic meters (including VAT) or €31.8/MWh, while Day Ahead spot prices on the Dutch TTF amounted to €31.5/MWh.
That is, for the first time since May 1, 2024, natural gas prices in Ukraine have risen above European gas prices, and the spread between prices reached €0.3/MWh in favor of Ukrainian prices. However, this does not take into account the cost of gas transportation to Ukraine.
What is the reason for this price difference?
According to ExPro experts, natural gas prices in Europe have been declining over the past week amid warm weather and stable gas supplies.
At the same time, gas prices in Ukraine have been rising due to stable demand, including from state-owned companies Naftogaz and GTS Operator of Ukraine.
At the same time, supply volumes on the market decreased as Ukrnafta stopped selling gas after the Cabinet of Ministers obliged it to sell gas for Naftogaz as part of its special obligations.
How will this affect gas imports from Europe?
Experts say that the spread between gas prices in Europe and Ukraine is currently too small to allow private companies to resume commercial imports of natural gas to Ukraine, as it does not cover the cost of delivering gas from Europe to Ukraine.
However, if the trend continues, traders may start importing gas to sell it on the Ukrainian market. Naftogaz of Ukraine imports all natural gas in April, and this volume has recently amounted to 8.6 million cubic meters per day.
As you know, Naftogaz has stated that Ukraine needs to import 4-4.5 billion cubic meters of natural gas before the start of the heating season. It is possible that, given a favorable spread, private companies could import part of this resource.
Earlier, the former head of the Gas Transmission System Operator of Ukraine, Serhiy Makohon, also drew attention to the fact that the price of gas in Europe at the TTF gas hub has decreased by almost 45% from a peak of 58 euros per MWh in the first decade of February to about 32 euros per MWh today.
According to him, this is a good opportunity to import gas.
“This year, I am pleased that Naftogaz has already started imports. Although now only 9 million cubic meters enter Ukraine daily. I hope that imports will increase significantly soon,” the expert emphasized.
He said that together with its own production and existing imports, the injection is currently about 25 million m3 per day, which will allow pumping 4.5 billion m3 by November 1 (if imports are at the same level), while at least 8.3 billion m3 is needed.
As a reminder, Ukraine ended the season of gas withdrawal from underground storage facilities on April 17 and started injecting gas into the storages.
