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OVERVIEW OIL AND GAS: February 2020

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According to the GTS Operator, gas imports saw 76% increase in the first quarter of 2020.


In January-March 2020, natural gas imports from the EU reached 2.7 BCM, which is 1.2 BCM, or 76% more than in the first quarter of last year, 6% exceeding the average figure in 2016-2019.
In particular, during the first three months of 2020, imports from Slovakia amounted to 1.9 BCM (+ 99% compared to the same period last year), from Hungary - 0.5 BCM (+ 58%), from Poland - 0.35 BCM (+ 21%). Let us note that these volumes of imports from Poland also include a virtual reverse, which became available for the first time since the beginning of this year - 0.28 BCM.
In addition, according to the recent reports of Gas Transmission System Operator of Ukraine, 1.3 BCM of natural gas was imported to Ukraine in March 2020. This is 2 times more (670 MCM) than the imports volumes in March 2019.
As of today, all imported volumes of blue fuel come solely from the EU countries. Ukraine terminated to import gas from the Russian Federation since November 2015.
As for gas production, Ukraine reduced natural gas production by 3% - to 5.12 BCM in the first quarter of 2020, according to the recent reports by GTS Operator of Ukraine.
During this period, Ukrgasvydobuvannya produced 3.6 BCM of gas, which is 6.5% less than in January-March 2019.
Private companies increased gas production by 8.3% - to 1.2 BCM, compared to last year. Ukrnafta PJSC also increased gas production by 2.4% - to 296 MMCM.

In March 2020, Ukraine produced 1.7 BCM of natural gas, which is 6.3% more than in February 2020, but 4.4% less than in March last year.
The average daily gas production during the month amounted to 56 MMCM, which is about 300 TCM less than in February.
In March 2020, GTS Operator provided transportation of 4.6 BCM of natural gas to the EU and Moldova. Compared to the previous month, this figure increased by 18%, but decreased by 2.6 BCM or 36% in terms of March 2019 volumes.
According to the results of the Q1 2020, gas transit through the GTS of Ukraine made up 11.1 BCM, which is 53% less than in the same period of the previous year. Transit volumes actually grew twice less compared to January-March 2014-2019 average. However, since the beginning of 2020, gas transit facilities from the Russian Federation have been fully paid by Gazprom under the new transit agreement at the rate of 65 BCM per year (178 MMCM per day).
As for gas reserves, according to Skat-Trade company, Ukrainian GTS in February 2020 mainly withdrew natural gas from underground gas storages (UGS). Entering the second month of 2020 with 16.954 BCM, Ukraine reduced own gas reserves by 6.5% - to 15.858 BCM at the end of the month (see Figure 1). While as of the morning of February 1, 2020 storages were 55% full, the coverage of active capacity at the end of February 28, 2020 was 51%.
The reduction of gas assets in UGS was due to their stable withdrawal. The highest daily amount of natural gas withdrawal was recorded on February 10, 2020 - 70.5 MMCM.
Total gas withdrawal during this month amounted to 1.128 BCM. Injection procedure has not been marked in a single day in February 2020.
Comparing February of this year to the same periods of the previous four years, it should be noted that the total February volume of gas withdrawal in 2020 slightly exceeds the volume of February 2016 and is inferior to the remaining February months of the last five years (see Figure 2). Gas injection has not been marked in the last five years in February.
The largest drop in gas resources compared to the same period of the last five years was recorded in February 2018 – 19.7% or 2.529 BCM. The drop in February 2020 is 6.5% or 1.128 BCM.
Instead, February 2020 is the leader of the last five years in terms of the level of natural gas available in UGSs at the beginning (16.954 BCM) and at the end of the month (around 15.858 BCM).

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