There was a rising price trend at the auction last week. At the Ukrainian Energy Exchange, trading activity has increased significantly.
For the last two weeks auctions initiators have formed 175 starting positions for purchase and sale of natural gas. UEEX have proposed for sale resource of August, September, October, November, December and gas in UGS. Among auctions initiators market participants of different categories were presented – traders, producing companies, large consumers, natural gas supplires. There were offers for both the purchase and sale of the resource. In general, the cheapest auctions initiators evaluated the resource of August (UAH 3218), and the most expensive - the resource of December (UAH 6650).
Totaly 46.4 cubic meters of natural gas were sold within two weeks, including 27.6 cubic meters of UGS, 11.8 cubic meters of resource September and 7 million cubic meters of resource of August. In most cases, the trading price exceeded the starting price, i.e. was increased during the trading process.
The trades were initiated by 14 companies. The biggest attention was paid by the participants to the resources of August, September and gas in UGS. As of August 14, quotations of the resource of August amounted up 4053.60 UAH, and in September - 4252 UAH with VAT per thousand cubic meters.
Last week, prices in European hubs continued the upward trend. On the Dutch hub TTF quotations as of August 13 amounted to 6.29 EUR / MWh, which is equal to the price of 79 USD per thousand cubic meters. On other hubs the spot price was higher - up to 114 USD per thousand cubic meters. September prices were 16% higher, the quarter ahead 62% higher, and the season ahead 71% higher than the current spot prices. Demand for natural gas in Europe is gradually recovering.
Oil prices have resumed growth. Thus, as of Friday, August 14, the value of October futures on Brent oil is 45.11 dollars per barrel.
Prices of contracts with delivery at the appropriate time, USD/t. c. m.,13/08/2020
The majority of indicators of the Ukrainian GTS are at a high level. For example, the total level of import in the first days of August exceeded 100 mln c. m. The Slovak route remained the main one for gas imports and accounted for about 80% of daily flows.
The domestic production rate remained stable - about 55.0 million cubic meters each. Injections into underground storage facilities was also at a consistently high level. Thus, the volume of injections on August 12 was 110.72 cubic meters. As of August 10, the total volume of natural gas in Ukrainian underground storage facilities reached 23.294 cubic meters.
During the last two weeks, 22 tenders for the purchase of natural gas by public authorities were held. Totally more than 1,9 mln c. m. of natural gas was purchased for the total amount 5,9 mln. UAH. The largest contract was awarded to EKOTECHNOINVEST.She will supply 330.0 thousand cubic meters of natural gas at an initial price of 3.42 UAH/c.m. to the Pushcha-Voditsa medical rehabilitation center. In addition, the departments of education of district public administrations conducted 2 more tenders at the prices of 3.26 UAH / c. m. and 3.32 UAH / c. m. Thus, the prices ranged from 2.26 to 3.95 UAH per c. m.The French company ENGIE became the winner of the Ukrainian GTS Operator’s auction for supply of 20 million cubic meters of gas at a price of 3.42 UAH / c. m. Besides ENGIE, German company RWE Supply and Trading GmbH also took part in the auction. After the auction, the total purchase price is 2.11 mln EUR.
From August 2020 Ukrtransgaz started to publish daily updated information on the available capacity of gas storage facilities on its website. In addition, a function to monitor the free capacity of gas injection and extraction for the current and next days has been added to the Information Platform of the gas storage operator. Thus, Ukrtransgaz improves transparency of gas storage management processes in accordance with international standards. Thanks to the new service, customers of gas storage services (700 Ukrainian and 72 foreign companies) can see updated information on the available capacities of gas injection and extraction 24/7. Such information is updated each time after the completion of the procedure of consideration of nominations / renominations, which allows customers to quickly plan their own business processes related to gas storage, respond to market changes, balance. The introduced free capacity monitoring complies with the information resources performance standards of most gas storage operators in the EU.
The EBRD will provide a 51.85 million EUR loan to Ukrgazdobycha, which will be used to maintain Ukrainian gas production and improve energy efficiency. It is noted that the loan is guaranteed by the state of Ukraine. The cost of the state guarantee is 1% of the selected and outstanding loan. The raised funds will be used by Ukrhazvydobuvannya to upgrade its stock of workover well machine (well workover) for operations at depths over 5 km and to introduce energy-efficient technology to reduce energy consumption in the Lokachinskoe field in the Volyn region. Procurement for both projects will be carried out on the EBRD’s tender platform, according to the Law of Ukraine on Public Procurement and Principles, and the bank’s procurement rules for public sector projects.
In a global report on gas 2020, being published by International Gas Union (IGU), BloombergNEF agency and Snam Company indicated, that world gas consumption has been determined to reduce by about 4% in 2020, because of COVID-19 case decrease gas consumption in the global economy. However, the report indicated that the market will recover from the pandemic. Reduced use of gas in 2020 will lead to low gas prices, and coupled with clean air and climate policies will encourage further shifts to gas from other more polluting energy sources, such as oil and coal. This will help to expand the global gas industry after COVID-19 as gas applications in key areas including energy, industry and transport will increase in major regions including Europe, North America and Asia. According to the study, the gas infrastructure is expected to develop significantly in the medium term.