Gas Price: Ukraine and Europe. Market overview


The second half of February was marked by an increase in the activity of companies in trading of March and February resourse. There was a pronounced downward trend in prices.

Ukrainian Energy Exchange

Over the past two weeks, 15 companies initiating the auction formed starting positions for both sale and purchase. In general, the participants were most interested in the resource of March and February 2021, despite the end of the month.


There was a noticeable dynamics of lower prices, which was traced from the starting prices of resources. The initiators estimated the resource most expensively in March 2021, but the gap between the starting prices in February, March and UGS was minimal. The cheapest price was estimated in May 2021. Starting positions for the sale of this resource were formed only by PPC starting from February 17.


Natural gas sales prices were confidently approaching the mark of UAH 7,000.Thus, on February 23, Ukrspirt purchased the resource of March at a price of UAH 7,022. In general, over the past two weeks, the level of quotations has decreased by about UAH 400.

By the end of last week, buying and selling activity had declined due to the end of the month and declining demand for the resource in February. Bidding was initiated by several companies that had previously been active by bidders. For example, on February 17, Agro Gas Trading announced the first bidding for the purchase of natural gas on UEEX, and on February 19, the company bought 2 million cubic meters of gas in the UGS with the transfer in February.


In total, 151.74 million cubic meters of natural gas were sold in two weeks , of which 87% - the resource of March. For the third time in 2021, the resource of April was sold on February 16. Thus, according to the latest quotations, the sale price of the resource of February amounted to UAH 7,173, of March - UAH 7,450 (postpaid), and of April - UAH 7,400.71 per thousand cubic meters.
There is a revival of activity of companies on the UEEX short-term market of natural gas. Over the past two weeks, 2,688,000 cubic meters of natural gas were sold, including the intraday market - 1051 thousand cubic meters, on the market "a day ahead" - 1637 thousand cubic meters.
Thus, the traded volumes on Day-Ahead exceeded the volumes of Within-Day for the first time. The price of both markets was in a very similar range for two weeks, falling from about 7700 to 7200 UAH per thousand cubic meters on February 26.

European market


European hub prices have recently tended to decline due to the end of the winter season. The lowest quotations are observed at the Hungarian hub CEEGEX, which as of February 26 amounted to 16.18 euros / MWh, which is equivalent to USD 207.33 per thousand cubic meters. Quotes on the TTF hub were close to $ 207.70. per thousand cubic meters. At other hubs, the spot price was higher - up to $ 219. Contracts for the month ahead and the quarter ahead at the end of February were on average equivalent to current spot prices, and the season ahead was 1% more expensive. Oil prices have risen over the past two weeks. The price of futures for February of Brent oil as of Friday was USD 65 per barrel.

Prices of contracts with delivery in due time, EUR/MWh, 25/02/2021

InstrumentNCGCEGHTTFGaspoolTGE/POLPXCEEGEX/HUDEXAverage volume
Day116,2916,5016,2116,3917,0716,1816,44
Mar2116,1716,1915,9016,1618,2716,3616,51
2Q2116,1316,4115,8016,0917,8216,5216,46
S-2116,1216,3915,8316,0919,0316,6316,68

Gas balance in Ukraine


Imports of natural gas from the European direction for the past two weeks remained at 1 million cubic meters and almost all was from Slovakia. The volume of domestic production averaged about 53.4 million cubic meters per day which is slightly more than in the past two weeks. According to Expro, in January 2020, Ukraine reduced natural gas production by 4% to 1.68 billion cubic meters. The largest decline was observed in state-owned companies, while private companies maintained the level of production.
Consumption fluctuated significantly due to changes in weather conditions. As of February 24, 18.43 billion cubic meters of natural gas were stored in Ukraine, which is 8% less than two weeks ago. Selection from UGS was on average about 100 million cubic meters and was the main source of gas supply in the GTS of Ukraine.

Public procurement

Over the last two weeks, the number of tenders for the purchase of natural gas has been gradually declining, due to the approaching end of the heating season. In total, natural gas was sold in the amount of UAH 177 million. and about 300 tender procedures were conducted. The largest contract was awarded to TEK. It will supply the apartment-operational department of Zhytomyr with 2.6 million cubic meters of natural gas at a starting price of UAH 6.57 / cubic meter. Prices ranged from UAH 5.37 to UAH 9.90 per cubic meter. The average price for the largest tenders was UAH 7.33 per cubic meter.


Interesting for the week

Gas transit through Ukraine has fallen to its lowest level in a year amid warming in Europe and frosts in Russia. After the frosty front "Beast from the East 2", Europe was captivated by unprecedentedly warm weather. This contributes to Gazprom, as in the same days in Siberia, the Ural and the Volga region are severe frosts, increasing gas consumption inside Russia. During the first 16 days of February, gas pumping through Ukraine was stable with an average level of 119 million cubic meters per day. Then began a gradual decline in volumes, so for the gas day on February 20, transit fell to 67 million cubic meters.

The "jump" in Asian LNG prices in January due to very cold weather in Northeast Asia and supply problems led to the conclusion that other factors, due to which the surge in prices may have been expected, had an impact. The lack of a strong UGS in the region, especially in a country like Japan, means that the market does not have the reserve flexibility that Europe has. This is complicated in Japan because of the nature of its fragmented market with few pipeline connections between major cities and regions. Another insufficient element in Asia is the lack of a liquid physical trade market operating in Europe and North America. To avoid duplication, there seems to be no choice but to create the right policy to create a liquidity hub where risks can be reduced, combined with additional short-term storage capacity.

Naftogaz entered the exchange with new favorable terms of payment for gas. On February 16, 2021, the Naftogaz Trading division entered the UEEX with a new product that provides for the payment of gas with a delay of 45 days. This initiative came about in response to requests from traders who are having difficulties with free funds. A necessary condition for concluding a contract with deferred payment is the provision of 100% coverage of the contract in the form of a bank guarantee. Attractive payment terms apply to delivery transactions in the current and next month. For example, if the gas is supplied from March 1 to March 31, the payment for the resource must be received by May 14 inclusive.