Ukraine passes resolution amending tariffs for natural gas storage

Ukraine
On 19 June 2018, the National Commission for State Regulation of the Energy and Public Utilities Sector (“Regulator”) adopted Resolution No. 480 On approval of tariffs for storage (injection, withdrawal) of natural gas in the underground storages of JSC “Ukrtransgaz” dated 19 June 2018, which entered into force on 1 August 2018.

This Resolution amends the tariffs for storage of natural gas in Ukrainian underground facilities, and  changes the price-calculation model from payment for volume to payment for booked capacity of natural gas for a specified period.

Please follow this link to an earlier Law-Now article for more information on the methodology for natural gas storage.

In particular, the Resolution changes gas storage prices in the following ways:

Services 

Tariffs 

 Before 1 August 2018

After 1 August 2018 

 Storage

 UAH 46.20 (approximately USD 1.70)* for 1,000 cubic meters of natural gas per 1 year

 UAH 0.1720 (approximately USD 0.00634)* for 1,000 cubic meters of natural gas per 1 day

(The annual cost will be UAH 62.78 (approximately USD 2.32)* for 1,000 cubic meters of natural gas storage)

 Injection  UAH 32.90 (approximately USD 1.21)* for 1,000 cubic meters of natural gas  UAH 64.40 (approximately USD 2.38)* for 1,000 cubic meters of natural gas per 1 day
 Withdrawal  UAH 32.90 (approximately USD 1.21)* for 1,000 cubic meters of natural gas  UAH 67.10 (approximately USD 2,47)* for 1,000 cubic meters of natural gas per 1 day


* Calculated according to the official National Bank of Ukraine exchange rate as of 10 August 2018.

In addition, the Resolution introduces increase of storage (injection withdrawal) tariffs for booking on a monthly and daily basis instead of annually. A coefficient of 1.1 will apply to booking on a monthly basis and 1.2 for booking on a daily basis.

The Resolution increases storage prices, and thereby contributes to the reform of the Ukrainian gas market and investment attractiveness of Ukrainian gas storage operator.

For more information on this Resolution, please contact our energy team in Kyiv.