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Low volume of gas is translating into high prices

In August 2021, natural gas transit via the Ukrainian gas Transmission System Operator (TSO) to European countries amounted to 3.838 billion cubic metres (bcm). In particular, the Gas TSO of Ukraine transited 0.34 bcm to Poland, 2.5 bcm to Slovakia, 0.8 bcm to Hungary and 0.19 bcm to Moldova.

According to the company, due to a lower volume of gas transported by Gazprom, prices in Europe have reached a record high level.

At the beginning of 2021, Gazprom, in line with the terms of the transit contract reduced the volume of gas transported via Ukraine rom 180-185 million cubic metres (mcm) per day to some 124 mcm per day. Then, at the auction on 16 August, Gazprom booked for September only 4 per cent (0.65 mcm per day) out of the proposed 15 mcm per day. Thus, the volume of gas transportation through the territory of Ukraine in September will decrease even more – to 109 mcm per day.

According to Sergiy Makogon, General Director of Gas TSO of Ukraine, the record rise of gas prices at European gas hubs was the consequence of such a transit policy, according to which the volume of transportation in 2021 decreased from 65 to 40 bcm. In particular, on 1 September, the price of October gas futures on the European stock exchange reached 650 US dollars per thousand cubic meters. The price of gas in Europe has almost tripled over the year.

“Ukraine constantly offers additional transit capacity to supply additional volumes of gas to the EU,” said Mr Makogon. “However, Gazprom, unfortunately, constantly refuses them. It seems that by acting this way Gazprom not only encourages further growth of gas prices in the EU but also sends very transparent signals to Europe that additional gas volumes are only possible via Nord Stream 2.”

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