11.06.2012
Naftogaz Ukrainy has paid Russia’s Gazprom USD 648m for its gas purchases in May.

Ukraine’s oil and gas monopoly Naftogaz Ukrainy has paid Russia’s Gazprom $648m for its gas purchases in May. In other news, the company is negotiating to import 3 bcm of Qatari gas from Poland on an annual basis. 
 
Dragon Capital view: Naftogaz’s May gas bill implies imports in volume terms of 1.5 bcm (-48% y-o-y), bringing YTD imports to 10.2 bcm (-55% y-o-y) or $4.2bn (-31% y-o-y) in value terms based on an average price of $417.1/tcm (+53% y-o-y). Very low imports in May suggest that Naftogaz pumped no gas into its underground storage facilities during the month. Thus, in order to meet its previously announced storage supply target of 10-11 bcm by the fall-winter heating season, the company would need to buy an additional 2 bcm per month by October.Separately, according to media reports, Naftogaz’s efforts to negotiate gas imports from Germany through Slovakia have so far yielded no result and the company is now considering buying gas from Poland after the latter agreed with Qatar to build an LNG terminal. Poland may import up to 10 bcm of Qatari gas annually, of which 3 bcm may be further exported to Ukraine. In order to make imports from Poland technically possible, Ukraine needs to invest $100-150m to modernize a pipeline link to enable reverse gas flow. Naftogaz estimates such imports could be 10-25% cheaper than the current price of Russian gas for Ukraine. Still, this project seems feasible in the medium term only as it depends on the time frame for LNG terminal construction and modernization of the Ukrainian-Polish pipeline link.

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