Last week quotes of Western European Hubs began to rise. At the Ukrainian Energy Exchange, trading activity remained stable, prices also showed a slight upward trend.

Last week, 5 trading sessions were held at the Ukrainian Energy Exchange. Companies - initiators have put up natural gas orders for sale and purchase with a total starting volume of more than 21 million cubic meters, half of which was the resource of September. Starting prices fluctuated in the range of 4950-5515 UAH for the September resource, 4800-6104 UAH for the October resource, 4950-5480 UAH for the resource in UGS. On average, participants estimated the value of thousand cubic meters of gas in October for 500 UAH more expensive than the September resource.

According to the results of trading sessions, PPC sold 1.6 million cubic meters of the September resource, Fortex Energy managed to purchase more than 1 million cubic meters of the UGS resource, and Ukrspirt bought 2.05 million cubic meters of the October resource. Traditionally, Naftogaz Trading had the largest sales volume - the company sold 2.15 million cubic meters resources of September and October.

On Friday, September 13, according to the trading results, the following exchange quotations were formed: 5205,78 UAH per thousand cubic meters of the resource in September, 5670,68 UAH per thousand cubic meters of October resource. During the week, prices showed a slight upward trend, similar to the quotes of European hubs.

Last week, natural gas quotations in Europe showed a growing trend. For example, spot prices rose on 26% compared to last week, next month’s supply contracts increased on 13%, the next quarter - 12% and the winter season - 11%. Prices have grown as a result of concerns over supply cuts due to restrictions on the use of the Opal Gazprom gas pipeline and rapid production cuts in Netherlands’ Groningen. Thus, for example, the TTF supply contract in October quickly reached its two-month high. Deliveries through the Opal gas pipeline should be reduced by 50% as of Saturday, September 14th.

Trump’s words are again affecting the world oil price. As a result of his statement on September 11 about a possible reduction in sanctions against Iran, oil quotes were reduced by 3 $ up to about 60 $ per barrel.

Natural gas imports remained high last week, at about 68.5 million cubic meters per day, gas injection to the UGS is active - about 75 mcm/day. UGS has already accumulated 19.19 billion cubic meters thus the goal of 20 bcm is almost reached. Capacity allocated was 102% of technical capacity, which is a confirmation of the favorable situation for gas imports.

Meanwhile, Ukrtransgaz informed about the work results of the GTS of Ukraine in 2019. In just eight months of 2019. Totally 9.6 billion cubic meters of blue fuel were imported to Ukraine, which is more than 40% of the same period last year. In the beginning of the year and as of September 1, 2019, natural gas in GTS from Ukrainian gas production enterprises increased by 1% compared to the year before, up to 13.9 bcm. Consumers used 16.7 bcm of gas in 2019, which is 8% less than in 2018.

Ukrtransgaz continues to prepare GTS facilities for reverse operation. The repair and modernization of Komarno compressor unit in Lviv region is underway. The projected capacity of the upgraded site will be 15 million cubic meters per day in forward flow and 18 million cubic meters per day in reverse mode from Poland, reports Ukrtransgaz.

Last week, about 30 public procurements were conducted in the form of auctions. In general, budgetary institutions purchased gas for more than 12 million UAH on tenders. The average price increased to 4.75 UAH per cubic meter. However, in the largest tender there was a price offer that does not correspond to the latest trends in Ukraine. The largest tender was received by UKR GAZ RESOURCE - it will deliver 304 thousand cubic meters of natural gas at a price of 6.43 UAH per unit for Education Department of Poltava District State Administration.

Naftogaz lowers gas price for PSO customers in September. Therefore, the price of gas at which Naftogaz sells it to gas companies in September and supplies it to consumers for PSO is set at 4 493,64 UAH per thousand cubic meters (excluding VAT and transportation costs). Compared to August, the cost of gas will decrease by 3.4%. The final gas price in the regions of Ukraine depends on the gas distribution tariff.

Russia has agreed to provide Moldova with a discount on natural gas supplies since October 1. Moldova buys almost all its gas in Russia under a long-term contract, which expires on December 31. Currently, Moldova pays almost 240 $ per 1000 cubic meters for these deliveries, but lobbies for price reductions. The Kremlin spokesperson said the talks with Moldova were nearing completion and suggested terms of co-operation suitable for both sides of the talks.

Most of country’s gas supply companies have joined YourEnergyIndependence drive. Already 25 companies from 22 regions of Ukraine provide this service. More than 470 families have already purchased the Gas Reserve from GSC Naftogaz of Ukraine. GSC Naftogaz of Ukraine offers gas at a fixed price of 5849,3 UAH per thousand cubic meters (excluding shipping, distribution and vendor charges). As part of the Gas Reserve, anyone can prepay required volume of gas within the volume of 25 thousand cubic meters.

Gas production at the Dutch Groningen field will decline at an accelerated rate. In this regard, the government will seek to complete production before 2030, contrary to previous plans, said Minister of Economy and Climate Policy Eric Wiebes. Production at Groningen has fallen by about 13% in annual value since the beginning of the year, which has negatively affected gas production in the Netherlands as a whole. In the first half of the year, production in the country declined to about 18.7 bcm compared to 20.3 bcm in the same period of 2018. As previously reported, after a 3.6 magnitude earthquake on the Richter scale with the epicenter in Heisingen, the gas regulator told the Dutch government about the "direct relationship" of Groningen production levels and the likelihood of earthquakes. Later, more than 20 lawsuits from citizens and non-governmental organizations went to court, demanding to completely stop mining at the field. In March 2018, the government of the country approved a plan to halt production in Groningen by 2030.

German network regulator Bundesnetzagentur has ordered the operator of the Opal gas pipeline to immediately comply with the Decision of the EU Court to restrict Gazprom’s access to its facilities. In October 2016, the EC decided to allow Gazprom to use 100% of Opal pipeline capacity of 36 bcm/year. Using this opportunity, Gazprom was able to increase deliveries through the Nord Stream, which communicates with OPAL in northeast Germany. But the EU Court cancelled the ruling on 10th September. Gas transmission by Gazprom through Opal should be reduced by 50% of capacity. The Opal limitation means a reduction in supply through the Russian Nord Stream gas pipeline. However, the Bundesnetzagentur noted that Gazprom has access to other routes to ensure that its obligations to customers are fulfilled.