In Europe, natural gas prices have been relatively stable throughout the week with a slight downward trend on Thursday. On the UEEX there was an extremely high trading activity, exchange quotations had a side trend.

During the week, 12 initiators of trading formed almost 80 starting positions on natural gas purchase and sale at the UEEX. The participants’ attention was focused on the November resource trade, but there were also successful offers to sell natural gas in UGS facilities. The starting prices of the October resource were in a narrow range - 4850-5470 UAH, and the November resource - in a fairly wide range - 4950-6700 UAH/thousand cubic meters, which indicates that there is still uncertainty about the nearest price trends.

Natural gas trade in UGS facilities has activated. Starting prices of the resource were in the range of 5050-5650 UAH/tcm. On October 23, Naftogaz of Ukraine initiated the purchase of gas through the UEEX electronic platform for the first time. The company has already held 3 trading sessions, the results of which were used to purchase 12.3 mcm of natural gas resources of October, November and gas in UGS facilities. Thus, for the first time in 2019, the volume of trades for purchase exceeded the volume of trades for sale, which is related, among other things, to low gas prices this fall.

A total of 300 tcm of October resource were sold during the week, nearly 5 million of November resources and 11 mcm of gas in UGS. Thus, last week at the Ukrainian Energy Exchange ended with the following exchange quotations: 5220 UAH for the October resource, 5246 UAH for the November resource and 5 436 UAH for the resource in UGS.

Last week, spot prices dropped by an average of 5.6%, which is not significant. Quotes for the next month and quarter also decreased by 5.6% and 5.4% respectively. Spot prices in Europe were about 118 $/tcm, the month-ahead contracts were 36% more expensive, the quarter-ahead - 44%, the season-ahead - 42% more expensive than current spot prices. Over the past week, natural gas prices in Europe have stabilized amid steady supply, storage capacity and warm weather. Current temperatures in Europe are expected to drop this week, boosting demand for heating and price fluctuations.


Natural gas imports fell by 2 mcm last week, gas injection into the UGS also decreased to 47 mcm/day, but compared to the same period last year, the figures increased by more than 40%. Consumption has not changed significantly due to the stable warm weather. It should be noted that for the same period of 2018, intake from UGS has already started and amounted to 0.6-0.7 mcm/day. At present, the intake is not carried out or is insignificant for the formation of the final indicator. Allocated capacity remained unchanged from last week, accounting for 85% of technical capacity. The high capacity utilization rate at the border with Poland remains. UGS has already accumulated a record 21.5 bcm of natural gas.


In the form of auctions, 37 tender procedures were conducted. Budget institutions are actively purchasing gas for the heating season. In total, about 4 mcm of natural gas worth more than 22 million UAH were sold. The largest contract was won by Blagogaz Zbut. It will supply 531 tcm of natural gas at the initial price of 5.40 UAH/cm to the Education Department of Kyiv-Sviatoshinsky District State Administration. In general, prices ranged from 4.25 to 6.36 UAH per cubic meter. But there were such companies that won the tender for the supply of 72 tcm of natural gas at the price of 0.07 UAH per cubic meter. The average price, without taking into account the stated price offer, was 5 UAH per cubic meter.

Ukrainian Energy Exchange became a member of Europex. On October 18, a decision was made to accept UEEX as a member of Europex, membership registration will take place in June 2020. Europex is a professional organization representing the interests of exchange wholesale markets: electricity, gas and emissions trading. The Association focuses on the development of a European regulatory framework for wholesale energy trading and provides access to a European-level discussion platform. Europex members are the world’s leading financial institutions, including EEX, ICE Endex, Nasdaq Commodities, Nord Pool, Pegas, CEGH.

USAID will help Ukraine to transfer gas metering into kilowatt-hours. OGTSU and Tetra Tech, a USAID energy security project, have signed a memorandum of cooperation. USAID will provide technical assistance to OGTSU - in particular, help draft legislation to move from metric to energy units for operations in the gas sector.
The parties agreed to attract and use international technical assistance to improve Ukraine’s energy security. The cooperation will last until June 30, 2023.

Updated methodology for calculating the tariff for gas transportation for entry/exit points for the new GTS operator is published in the Uriadovyi Kurier newspaper. "Approved changes to the methodology allow to calculate and set tariffs for the future certified GTS operator," - said the head of OGTSU. Thus, tariffs will be revised in the near future.
On September 18, 2019, the Cabinet of Ministers of Ukraine updated the plan for Naftogaz’s unbundling. The new operator will be TOV (LLC) "Operator of the gas transmission system of Ukraine" (OGTSU), which since July 1, 2019 performs the functions of technical operation of the GTS and has the appropriate staff.

On October 22, 2019, representatives of Ukraine, Russia and the European Commission held technical consultations in Brussels. The consultations precede the next round of talks on the continuation of Russian gas transit through Ukraine to the EU after 2019. "During the meeting, the parties discussed Ukraine’s progress in the implementation of European legislation and the creation of an independent GTS operator," Naftogaz said. In addition, they discussed the signing of an interconnection agreement between the GTS operators of Ukraine and Russia on standard European terms, as well as the method of tariff formation in gas transportation. The next phase of the tripartite talks on gas transit is expected to take place on October 28.

Naftogaz has announced price offers for industrial gas consumers for November 2019. Offered natural gas prices from the Company’s resource are differentiated depending on the purchase volume and payment terms. Depending on these indicators, Naftogaz offers gas at the price of 7033 - 7756 UAH/tcm, VAT included. Compared to October 2019 prices, prices will increase by 18.4-19.6% in November. Such a change is caused by rising gas prices in the European market, from where Ukraine imports gas.

On October 23, 2019, the Amsterdam District Court arrested 100% of South Stream Transport BV, which is responsible for the construction and management of the Turkish Stream, Yuri Vitrenko reports. This was done in connection with the consideration of Gazprom’s fraudulent actions in the transfer of these shares to Transgaz Krasnodar LLC one day before the bailiffs started freezing Gazprom’s assets in the Netherlands under Naftogaz’s claim.