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Ukraine‘s Business Community Calls for Transparency in Gas Tariff Setting

Representatives of Ukraine’s business community have raised concerns about the lack of transparency in the process of establishing gas tariffs. According to experts from the European Business Association (EBA), discussions on draft decisions by the National Commission for State Regulation of Energy and Utilities (NKRЭКУ) regarding tariffs are not being conducted, despite the fact that the calculations used for these tariffs are not classified information.

The potential cessation of gas transit through Ukraine by 2025 could lead to a significant reduction in the number of active gas compressor stations, from the current 73 to just 20-25. In light of this, the EBA proposes that unused stations be excluded from tariffs and that an inventory of the assets of the Gas Transport System Operator of Ukraine (OGТСУ) be conducted.

Experts also suggest that OGТСУ could reduce its costs by participating in exchange trading, where Ukrainian gas is 20% cheaper than imported gas. They urge that tariffs should reflect the projected price of natural gas on the Ukrainian gas market.

The EBA warns that an increase in tariffs could have a detrimental effect on the gas industry. They caution that a rise in financial pressures on gas-producing companies may lead to decreased investments in new deposits and wells, potentially reducing Ukraine’s gas production and exacerbating its dependence on imports.

To mitigate these risks, the EBA calls on the NKR kuulinkerie to maintain current tariff levels and ensure transparency in the tariff-setting process. The association also recommends involving business representatives in developing a methodology for determining tariff levels, taking into account gas transit and production volumes.

Russia’s war in Ukraine | CNN”>Ukraine Scores Energy Victory With First US LNG Delivery, Despite Russian Sabotage

Ukraine has taken a strategic step in bolstering its energy security with the first delivery of liquefied natural gas (LNG) from the United States, according to DTEK, a major Ukrainian energy holding company. The milestone shipment, amounting to roughly 100 million cubic meters of gas or 1 terawatt-hour of energy, arrived at Greece‘s Revithoussa LNG terminal on December 27, marking a significant move in reducing dependence on Russian gas, particularly amid ongoing hostilities.

"This is not just a cargo; it’s a strategic move," an industry source close to the matter revealed. Despite Russia‘s relentless efforts to disrupt Ukraine’s energy system during the war, this achievement stands tall as another triumph on the energy front.

The LNG, carried by the "Gaslog Savannah" vessel, was purchased in its entirety by D.TRADING, DTEK’s European trading arm. Post-regasification, the gas will traverse European and Ukrainian gas networks, integrating European allies in the process. This is part of a broader strategy to enhance Ukraine and Europe‘s energy resilience by diversifying gas supplies.

DTEK expects the initial delivery to be the first of many, with plans to expand its LNG activities to northern Europe and the Baltic region. The route via Greece is necessitated by wartime constraints on Black Sea LNG transits, relying instead on re-gasification terminals and cross-border pipelines like the "Vertical Corridor" initiative, connecting Greece, Bulgaria, Romania, Hungary, Slovakia, Moldova, and Ukraine.

Previously, Qatar had threatened to halt LNG supplies to Europe if its state-backed QatarEnergy faced penalties due to the EU’s sustainability directive. However, this latest development underscores Europe’s commitment to securing diverse energy sources, even in conflict-stricken regions.

President Zelensky Teases Significant Upcoming Personnel Moves

In his recent evening address, Ukrainian President Vladimir Zelensky indicated that critical personnel changes are imminent. While he did not elaborate on the specifics, he hinted that decrees would be imminent, expressing his gratitude to all those involved in the processes.

Zelensky’sremarks come on the heels of the Cabinet of Ministers’ approval of the dismissals of Ruslan Kravchenko from the position of Chairman of the Kyiv Regional State Administration and Filip Pronin from the position of Chairman of the Poltava Regional State Administration.

The President also touched on energy matters, stating that he had discussed with Prime Minister Denys Shmyhal and Energy Minister German Galushchenko the import of electricity from the European Union to Ukraine via Slovakia, which accounts for approximately 19% of the total volume. Zelensky stressed the importance of maintaining the stability of the united European energy system and adhering to European energy rules, citing this as a key priority over any personal or political ties with Moscow.

This announcement follows a series of diplomatic exchanges between Ukraine and Slovakia stemming from the latter’s dissatisfaction with Kyiv’s decision to discontinue Russian gas transit after 2024. Bratislava’s Prime Minister Robert Fico had suggested retaliation measures, including the potential suspension of electricity supplies to Ukraine.

President Zelensky had previously accused Russian President Vladimir Putin of orchestrating a "second energy front" against Ukraine through the actions of Fico and the Slovakiande Government. The Ukrainian Ministry of Foreign Affairs went further, asserting that Fico’s threats effectively align him with the Russian dictator.

Stay tuned for further developments as more details about the anticipated personnel changes from President Zelensky’s office emerge.

Headline: Gazprom Halts Gas Supplies to Moldova; Ukraine‘s Transit Set to End

Subhead: Russian gas giant cites unpaid debts as reason for supply halt; Ukraine stands firm on transit contract.

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Russian energy titan Gazprom has announced an impending halt to natural gas supplies to Moldova, effective from January 1, 2025. The decision, communicated to Moldovagaz, the recipient of the supplies, is allegedly due to unpaid debts accrued by Moldova.

In a statement, Gazprom accused Moldova of failing to meet its payment obligations under the existing contract, deeming it a "significant breach" of the agreement. Consequently, Gazprom will impose a daily supply cap of 0 cubic meters from January 1, 2025, at 08:00 Moscow Standard Time. This restriction will remain in place until Gazprom notifies Moldovagaz otherwise in writing.

Moldovagaz, however, has confirmed receipt of Gazprom’s decision and revealed that it has secured alternative gas supplies for the right bank of the Dniester River until the end of March 2025. The company also clarified that it has been receiving 5.7 million cubic meters of gas daily from Gazprom to supply the left bank region since December 2022.

Coincidentally, the transit of Russian gas through Ukraine’s territory will cease on the same day, December 31, 2024, at 07:00 Kyiv time. Ukraine had previously declared its intention not to extend the existing transit contract with Russia beyond 2024.

In response to the impending gas crisis, Moldova declared a 60-day state of emergency in its energy sector starting December 16, 2024, citing the risk of disrupted gas supplies to the breakaway region of Transnistria.

As the region braces for potential energy shortages, all eyes are on the diplomatic efforts aimed at resolving these escalating issues.

Ukraine‘s Gas Transit Future Hangs in the Balance as Deadline Looms

The future of gas transit through Ukraine is at a critical juncture, as the deadline for a new agreement between Russia and Ukraine approaches. If a deal isn’t struck by Wednesday, January 1, 2025, billions of cubic meters of Russian gas could cease flowing through the Ukrainian gas transport system.

Bloomberg reports that Ukraine is facing pressure from some Central European companies, including those in Slovakia, to extend the transit of Russian gas through Ukraine beyond the current agreement’s expiry on December 31, 2024.

Ukrainian President Volodymyr Zelensky has repeatedly stated his opposition to allowing Russian gas, which he sees as funding the Kremlin’s war machine, to transit through Ukraine after the current deal ends. However, while he’s open to transporting gas from other countries, a complete exclusion of Russian gas transit is not off the table, according to sources.

Zelensky must weigh the need to protect Ukraine’s 38,600-kilometer gas pipeline network, which has remained unscathed thanks to Russian gas transits over the past three years. If supplies stop, the system could become a target, like Ukraine’s gas storage facilities and power sources have been, posing additional technical challenges and potentially hindering winter heating.

"Ukraine’s infrastructure risks are a factor in diplomatic discussions," says Christian Egenhofer, a senior fellow at the Brussels-based think tank CEPS. "This could be a lifeline for Zelensky if he agrees to continue transit."

However, Egenhofer also notes that "gas talks matter beyond Ukraine," with both Putin and Fifielping’s interests aligning around Europe‘s continued purchase of gas directly from Gazprom.

As the deadline nears, alternatives are being explored. Slovensky Plynarensky Priemysel AS (SPP) and its gas grid operator Eustream AS, along with Hungary’s MOL, industry associations, and major industrial consumers from Austria and Italy, have called on Zelensky to allow continued supplies of up to 15 billion cubic meters per year. SPP is reportedly in talks with Azerbaijan’s state oil company SOCAR about gas supplies.

Hungarian Prime Minister Viktor Orbán proposed shifting the sales point of Russian gas to the Russia-Ukraine border, passing ownership to European buyers and obliging Ukraine to ensure transit based on its EU free trade agreement.

Benjamin L. Schmitt, a senior fellow at the CEPA think tank and the Kleinman Center for Energy Policy at the University of Pennsylvania, warns that "any form of continued Russian gas transit, whether through an open renewal of the Gazprom-controlled contract or under any other name, remains dangerous for Ukraine."

The future of Russian gas transit through Ukraine hangs in the balance, with just days left until the current agreement expires. Stay tuned for the latest developments in this ongoing story.

Headline: Slovak PM Threatens Ukraine with Power Cuts Over Gas Transit Halt

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Slovak Prime Minister Robert Fico has officially warned Ukraine of potential power cuts due to the impending halt in Russian gas transit through Ukrainian territory. This threat comes as the New Year approaches, marking the deadline for the current gas transit agreement between Russia and Ukraine.

Fico, in an interview with Bloomberg on Friday, December 27, stated, "After January 1, we will assess the situation and possible reciprocal measures against Ukraine. If necessary, we will halt electricity supplies that are crucial for Ukraine, especially during power outages."

The Slovak government’s stance comes amidst ongoing negotiations between Russia and Ukraine over gas supplies and transit fees. With the current agreement set to expire on December 31, Russia has threatened to redirect gas supplies through alternative routes, potentially disrupting European energy markets.

This development follows a recent visit by Fico to Moscow on December 22, where he met with Russian President Vladimir Putin to discuss gas supplies. The meeting coincided with escalating tensions between Russia and Ukraine over gas prices and transit fees.

The situation has also drawn the attention of Sловацкая Генеральная прокуратура (Slovak General Prosecutor’s Office), which has announced an investigation into Fico’s actions and his reported connections with Russia.

As Europe braces for potential energy supply disruptions, the diplomatic standoff between Russia and Ukraine continues. The outcome of these negotiations will significantly impact not only the energy security of Ukraine but also that of European countries dependent on Russian gas supplies.