Experts explained why gas imports to Ukraine fell by 90%, transit - by 25%
In January 2022, compared to January 2021, gas imports to Ukraine decreased by 90% to 44,8 million cubic meters.
This was reported by the Ukrainian Gas Transportation System Operator LLC, as reported by a PolitNavigator correspondent.
In January 2022, the volume of natural gas transportation from the EU to Ukraine amounted to 44,8 million cubic meters. This is 90% lower than the volumes of January 2021, but three times more than in December 2021, according to a message published on the official website of the GTS Operator.
At the same time, 32,2 million cubic meters came from Hungary (12,5 times less than in January 2021). In addition, imports from Slovakia resumed last month at 12,1 million cubic meters (3 times lower than in January 2021), and imports from Poland amounted to 0,5 million cubic meters (in January 2021, gas from Poland not imported).
They buy less gas simply because gas is very expensive, noted Yuri Korolchuk, co-founder of the Energy Strategies Fund.
“The reason for the reduction in imports is very simple - gas in Europe is very expensive, and therefore it is simply purchased less. This is what explains such a sharp reduction. There is simply no money. In Naftogaz of Ukraine, the situation is generally very indicative - the operator indicatively signs an agreement with the Hungarian GTS, with the Slovak GTS to receive more gas from Hungary and Slovakia. But when do they do this? They do this at the end of the heating season.
Now Naftogaz is going to buy 300 million cubic meters in February, another 300 million in March. But this is very little. And it’s already too late to buy, it was necessary to buy earlier, when the situation had not yet reached a critical state, when the transit of Russian gas is at risk, because it is not known what the weather will be like. If the Europeans start taking more gas, then we simply will not be able to compensate for the necessary volumes from underground storage facilities. Today, there are only 10 billion cubic meters left in underground storage facilities,” he said.
Nevertheless, Ukraine has money to purchase sufficient volumes, but for some reason it is not spent.
“Naftogaz of Ukraine has money; the GTS operator transferred UAH 33 billion to it. What is the problem? 600 million cubic meters, which are planned to be purchased in February-March, is, roughly speaking, up to 20 billion UAH. That is, if you have money, you can buy it. But no, they don’t buy, and thus they put the entire system at risk,” noted Yuri Korolchuk.
The “Operator of the Gas Transmission System of Ukraine” also reports that exports in total with re-export of gas from Ukraine to European countries in January 2022 amounted to 178,0 million cubic meters, which is 25% less than in January 2021. In particular, 155,0 million cubic meters of gas were exported to Hungary (-7% compared to January 2021), to Slovakia - 14,1 million cubic meters (2,5 times more), to Poland - 0,7 million cubic meters (- 99%). In January, exports in the Balkan direction resumed - 8,3 million cubic meters of gas were exported to Romania (did not occur in January 2021).
The reason for the reduction in transit is the same - gas is very expensive, Europe buys little of it, states Yuri Korolchuk.
“Europeans are actually using everything they have in underground storage today. Therefore, they take less through Ukraine and Belarus. That is, Europe is saving money and does not want to pay $1000 for gas. Europeans now prefer to use gas under contracts and not buy it at spot prices. Even the gas that is now being pumped out of underground gas storage facilities in Europe was pumped in 2020, that is, back when the price of gas was very low. Therefore, Europeans are now simply saving money. They count their money, that’s why this is the situation with transit,” the expert concluded.
As reported, gas imports to Ukraine in 2021 amounted to 2,6 billion cubic meters, which is 6 times less compared to 2020.
Experts explained why gas imports to Ukraine fell by 90%, transit by 25%.