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Gas
siphoning may start in mid-January
If Gazprom
cuts gas sales to Ukraine, European exports will stay unaffected for the
period of 10-14 days. In the second half of January 2009, daily export flows
of Russian gas to Europe can drop by 45-50 million cubic meters (mmcm).
Table 1 shows average daily gas balances of Ukraine for the month of January
of 2006-2008, December 2002 and our projections for January 2009.
Table
1.
Ukrainian Gas Balance,
mmcm/day
|
|
12.2002 |
01.2006 |
01.2007 |
01.2008 |
01.2009А |
1-10.01.09 |
11-31.01.09 |
INPUT:
|
|
|
|
|
|
|
|
Production
|
53
|
58 |
59 |
58 |
59 |
59 |
59 |
Storage withdrawal
|
160
|
120 |
77 |
135 |
160 |
222 |
175 |
|
Import |
502 |
536 |
480 |
534 |
382 |
320 |
320 |
|
Total: |
715 |
714 |
615 |
727 |
601 |
601 |
554 |
|
OUTPUT: |
|
|
|
|
|
|
|
|
Consumption |
352 |
343 |
266 |
325 |
270 |
270 |
270 |
|
Transit
to: |
|
|
|
|
|
|
|
|
-
Russia |
2 |
1 |
0 |
- |
- |
- |
- |
|
-
Moldova |
12 |
12 |
11 |
13 |
11 |
11 |
11 |
|
-
Europe |
350 |
358 |
338 |
388 |
320 |
320 |
273 |
|
Total: |
715 |
714 |
615 |
727 |
601 |
601 |
554 |
|
Average
tº
C, Kiev |
-7.4º |
-8.2º |
+2.2º |
-2.9º |
-3º
-
-4º |
-3º
-
-4º |
-3º
-
-4º |
01.2009А - Average daily balance of January 2009 in
case of uninterrupted supplies of gas to Ukraine.
1-10.01.09 -
Average daily balance for the period from January 1 to
January 10, 2009.
11-31.01.09 -
Average daily balance for the period from January 11 to
January 31, 2009.
Underground
gas storage facilities (UGSF) of Ukraine have the maximum daily withdrawal
rate of 245-250 mmcm. Fully filled UGSFs can deliver 220-225 mmcm/day for
the period of 10 to 14 days. After that, UGSFs can withdraw 170-180 mmcm/day
for another 25-30 days. By the winter season of 2008-2009, Ukrainian UGSFs
got the record volumes of stored gas. Because of the warm weather, gas
withdrawal started in the end of November. Usually, the withdrawal starts
5-6 weeks earlier.
The negative
effect of the anticipated cut of gas supplies to Ukraine is partly
neutralized by the declining demand in Ukraine and Europe. Combination of
the economic crisis and warm weather has resulted in the 30% drop of Russian
gas exports to Europe in November 2008 compared to November 2007. Note that
in November 2008, gas exports to Europe were 19% lower than in the warmer
November 2006.
Gas sales in
Ukraine are falling even faster. In November
2008, the metallurgical sector of Ukraine consumed 53% less gas than a year
ago. Actual gas exports to Europe and Ukrainian consumption may be lower
than projected in Table 1. Naturally, the use of gas for heating purposes
depends on the weather, which is hard to predict.
We anticipate
the Russian-Ukrainian gas dispute to cause a very moderate drop in the
supplies of Russian gas to Europe. The deficit caused by
illegal siphoning of Ukraine can be compensated by the additional withdrawal
from European gas storage facilities.
Mikhail
Korchemkin, Managing Director
December 26, 2008
NOTE
There
is absolutely no doubt that Ukraine has to pay for gas it has
received from Gazprom. However, Gazprom and Ukrainian NAK Naftogaz
should consider simple ways of solving the debt problem, such as an
advance payment for gas storage services. The minimum European UGSF
tariff is $120 per 1000 cub.m (mcm), while the Ukrainian tariff is
set at the ridiculous level of $5/mcm. Currently, UGSFs of Ukraine
have 11-12 billion cubic meters of gas owned by Rosukrenergo and
Gazprom. The real market value of storage contract of this size is
at least $1.3 billion. In our view, Naftogaz could write off over $1
billion of its debt as an advance payment for the future withdrawal
of gas owned by Rosukrenergo and Gazprom. The market price of
Russian gas should be matched by the market tariffs for gas transit
and storage in Ukraine.
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