- New Naftogaz CEO Welcomes Foreign Energy Companies
- Forum: EU Carbon Tax Threatens Ukraine Industry
- Italy Supplies Clean Steel Technology to Metinvest
- Kyiv’s First Legal Casino Largely Serves Foreign Tourists
Yuriy Vitrenko, the new CEO of Naftogaz, says he welcomes foreign investors into Ukraine’s oil and gas sector. From now on, Ukraine’s state-owned oil and gas company will not “crowd out” foreign energy companies, he promised during a US-Ukraine Business Council webinar. Speaking from Washington, Vitrenko, a Naftogaz veteran, said he was behind many of the post-Maidan, free market reforms adopted at the company. Edward Chow, a former US energy company executive and a panelist, welcomed the 44-year-old Vitrenko, saying: “You have been preparing all your life for this job.”
Six weeks into the job, Vitrenko traveled to Washington in a last ditch attempt to stop Nord Stream 2 and to “rebuild trust” with US officials, he told Radio Free Europe. Describing himself as “a true reformer,” Vitrenko said he will focus on boosting Naftogaz’s production with the help of Western partners. Vitrenko also said he would go after Dmytro Firtash, the energy tycoon wanted by the United States on corruption charges.
Westinghouse fuel will power eight of Ukraine’s 15 nuclear power reactors by 2024, under a contract signed between the US company and Energoatom, Ukraine’s state company responsible for nuclear power generation. To reduce dependency on Russian nuclear fuel, Energoatom switches a seventh reactor later this year to fuel supplied by Westinghouse Electric Sweden. In 2024, a second reactor at the Rivne nuclear plant is to make the switch, Westinghouse reports.
All of Ukraine’s reactors are of Soviet design and 12 were built during the Soviet era, in the 1980s. Herman Galushchenko, Ukraine’s new Energy Minister, said: “Ukraine is interested in deepening cooperation with Westinghouse, as diversification of nuclear fuel supply is a guarantee of energy security.”
The EU’s ‘Carbon Border Tax,’ due to be adopted next month, threatens Ukraine’s industrial and energy status quo, speaker after speaker warned at the European-Ukrainian Energy Day forum in Kyiv. “Electricity trading cross the border may no longer bring in funds for needed investments,” warned Mats Lundin, chairman of the EU Energy Agency. “Steel exports may no longer be a viable business for the large Ukrainian industries that we have learnt to rely on for job opportunities and tax revenues.”
Ukraine has set ambitious CO2 reduction targets, but “the bulk of the work will fall on the period after 2030,” noted Matti Massikas, head of the EU Delegation to Ukraine. “Ukrainian industry pays currently 15 [euro] cents for emitting one ton of CO2. In the EU, the price has reached €50.”
The government is working on a green bond to help repay the nearly $1 billion in Ukrenergo’s overdue debt to solar and wind producers, said Ukraine’s Energy Minister Herman Halushchenko. But Baher El-Hifnawi of the World Bank and Mark Magaletsky of the EBRD cautioned that their institutions would only contribute to a bailout package if it were part of a comprehensive package of changes to prevent a recurrence.
A Rada bill to impose a 3.2% excise tax on renewable energy producers “is a step in the wrong direction,” Nefco, the Helsinki-based Nordic Environment Finance Corp. said in a statement released at a solar and wind producers forum in Kyiv. “Fossil energy should be subject to a CO2 tax.” After funding 421 MW of wind and solar projects in Ukraine, Nefco said it has frozen future funding because “the green tariff agreements [are] not being fulfilled.”
Vindkraft Ukraina is suspending plans to build a 200 MW wind farm in Kherson region this year, because “nobody is funding…everything is in limbo,” Carl Sturen, company CEO, told Interfax-Ukraine after Wednesday’s press conference. If adopted, the excise tax would cost Vindkraft €3 million a year, he estimated. With the changing rules and mounting debts, he said he is “constantly” renegotiating loans with banks.
Italy’s Danieli, a world leader in the production of steel plants, signed a deal to be the main equipment supplier for Metinvest’s new $1 billion cold rolling shop in Mariupol. In the first, $800 million phase, Danieli and Metinvest are to build a plant capable of producing 1.2 million tons of steel a year – cold-rolled, galvanized and color-coated. The Italian equipment “will allow Metinvest to achieve world-class product quality at all stages of production – from semi-finished products to coated rolled products,” Yuriy Ryzhenkov, director general of Metinvest, said at the signing ceremony.
A second stage will increase capacity by one third, to 1.6 million tons. Metinvest says: “The second stage of the project includes the construction of a new annealing furnace department, a skin pass mill and a roll slitting unit, as well as a new line for polymer coating on galvanized rolls.” The highly automated plant will create only 230 jobs.
The steel plant deal was the centerpiece of an Italy-Ukraine business forum opened by Luigi Di Maio, Italy’s visiting Foreign Minister. Ukraine’s Foreign Minister Dmytro Kuleba noted that Italy’s national railway company, Ferrovie dello Stato Italiane, recently signed a memorandum with Ukrzaliznytsia to develop high speed trains on an Odesa-Kyiv-Lviv route. He also noted that last month Italy’s AVIO S.p.A signed a €6 million agreement with Dnipro’s rocket design and production companies to produce 10 engines for the European Space Agency’s Vega launch vehicle.
Italy-Ukraine trade increased by 39% during the first five months of 2021 to $2.1 billion, Prime Minister Shmygal said. Italy’s export credit agency After a 6-year break, Italy’s export credit agency, SACE, recently resumed lending to Italian companies under contracts with Ukrainian companies. With the world’s 8th largest economy, Italy has a $1.85 trillion GDP – 27% larger than Russia’s.
In the first five months of the UK-Ukraine free trade deal, bilateral trade has jumped by 41.5% yoy, to $885 million, reports Taras Kachka, Ukraine Trade Representative. Trade liberalization came into effect on Jan. 1, the first day of Brexit.
The Billionaire, Ukraine’s first legal casino under the new gambling law, attracted a largely foreign clientele during its first month in operation. “We already have 1,000 people who have visited our establishment,” Andriy Parkhomenko, the casino’s guest relations manager, tells UNIAN. “Sixty percent of them are foreigners — mostly from the Middle East — Kuwait, Saudi Arabia, United Arab Emirates – Uzbekistan, Kazakhstan.“ Located in Kyiv’s Intercontinental Hotel, the casino paid $2.7 million for its main license and created 150 jobs.
By making a radical shift to charter flights, UIA kept its passenger losses in January-May to 25% below the level of the first five months of last year. With most Ukrainians barred from traveling to Europe, Ukraine International Airlines increased its passengers on charter flights 6-fold, to 466,765, the airline reports. By contrast, lost two thirds of its scheduled flight passengers, falling to 269,133, the airline reported.
- Inflation Nears 10%
- Foreigners Boost Bond Sales
- Exports to EU Jump by One Third
- Kyiv to Open 12 Business Centers This Year
- Coronavirus: All Regions Now Ranked ‘Green’
- Charters Sustain Airlines and Airports
Inflation in May increased by 9.5% in annual terms, up from 8.4% in April, the State Statistics Service reports. This is almost double last year’s inflation rate of 5%. Last month, the biggest yoy increases were: natural gas +162%; sunflower oil +75%; and sugar +67%. The biggest drops were: vegetables -13%; shoes – 4%; and clothes -3.6%.
With inflation now well above Ukraine’s 7.5% prime rate, the National Bank of Ukraine is expected to increase interest rates at its next board meeting, on June 17. The central bank had forecast inflation this year at 8%.
The Finance Ministry’s weekly auction raised $700 million in hryvnia and equivalent, 20% more than last week’s auction. Hryvnia rates were virtually unchanged Tuesday: 6 months – 9%; 14 months – 11.2%; 18 months – 11.3%; 2-year – 12.05%; and 3-year – 12.3% per annum. The novelty was a 5-year bond, which settled at 12.59%. One-year dollar denominated bonds sold for 3.7%, garnering $182 million, the Ministry reports on Facebook.
International buyers are back in the market, ICU has reported. “Last week foreign investors purchased UAH 2bn [$74 million] of new bills in addition to reinvesting funds they received from redemptions,” the investment group wrote of last week’s auction. Taras Kotovych, Senior Financial Analyst for ICU has calculated that international investors recently bought UAH 3-4 billion, an inflow that strengthened the exchange rate. One dollar was fetching UAH 27.08.
Two years after Ukraine started to cooperate with Clearstream, external investment in government bonds has doubled, the share of public debt in national currency has increased to 39%, and 5-year bonds have won acceptance, the Finance Ministry reports. In a press conference last week with representatives of the Luxembourg-based international depository, Ministry officials said external investors now hold UAH 98.3 billion, or $3.6 billion, in Ukraine government bonds.
Although down 24% from the February 2020 peak, this current investment accounts for almost 10% of the bonds in circulation. Ministry officials say that foreign investment contributed to the sharp decrease in weighted average yield on hryvnia bonds – from 18.7% in January-May 2019 to 11.2% in January-May 2021.
Ukraine’s exports to the EU have increased by more than one third – or $2.7 billion – so far this year, Prime Minister Shmygal announced at a Cabinet meeting. Growth picked up speed from a 12% increase registered for January-March, compared to the same period last year, In 2020, 41% of Ukraine’s foreign trade was with the EU bloc of 28 countries.
Clearing the way for the biggest privatization of this year, Ukraine’s Supreme Court refused to recognize a decision by Stockholm’s Arbitration Institute to award Dmytro Firtash’s Ostchem over $300 million from state-owned Odesa Port Plant. “This is a final decision that is not subject to appeal,” Dmytro Sennychenko, head of the State Property Fund, told Interfax-Ukraine. Looking ahead to a sale of the chemical producer through auction, he said: “This will help expand the pool of potential buyers and dramatically increase the value of the asset.”
Commissioning of housing increased by 20.5% during the first quarter, compared to January-March 2020, the State Statistics Service reports. Of the 2.3 million square meters, 70% was in urban areas. Kyiv city accounted for 6%, or 145,000 square meters.
16 business centers will open in Kyiv, with a total area of 376,000 square meters by the end of next year, Radomyr Tsurkan, managing partner of CBRE Ukraine, predicted in an interview with Interfax-Ukraine. “The collapse of the offices that scared everyone at the start of the pandemic did not take place,” he said. “According to a study conducted by CBRE in 2020, 73% of those surveyed want to return to the office and have a hybrid work format.” This year, 12 business centers with a total area of 207,000 square meters are to open in Kyiv.
With Ukraine reporting the lowest number of coronavirus cases in nearly a year, all 24 regions are now listed ‘green,’ the Health Ministry said. Restrictions have been eased to allow restaurants to serve indoors all night and cinemas and theaters to operate at two thirds capacity.
In advisories to international travelers, the U.S. Centers for Disease Control and Prevention promoted Ukraine to ‘Level 3’ – the same level as the United States. Ukraine now recognizes English language vaccination certificates as valid for entry into the country.
With new air shipments of vaccines arriving in Kyiv daily, vaccination centers have opened in Kyiv and 13 other cities. Kyiv residents can register online for free vaccinations on weekends at the International Exhibition Center 15A Brovarskyi Avenue using the Diia app and Helsi.me, an online service for booking doctor appointments. So far, 1.2 million Ukrainians have received their first vaccine dose, and 152,142 have received both doses. President Biden promised President Zelenskiy to deliver 900,000 vaccine doses to Ukraine.
Working around the EU’s travel barriers, Ukraine’s SkyUp undertook 1,419 flights in May, a record for the 3-year-old airline. Almost three quarters of the low cost airline’s 209,924 passengers flew on charter flights, largely to Egypt and Turkey, the airline reports. Ukraine will provide almost 20% of the 8 million tourists expected to visit Egypt this year, Egyptian ambassador Ayman Ahmed Mokhtar Elgammal tells Interfax-Ukraine.
Charter passenger traffic doubled at Kyiv Boryspil for the first five months of this year, compared to January-May period last year, reports the Center for Transportation Strategies. The nearly 2.5 million-passenger flow for the period was split nearly evenly between charter and regular travelers. Passengers on regular flights were down by one third and transfer passengers were down by 80%. Overall, traffic was down by only 1% compared to the same five-month period last year.
- Metinvest to Build $1 Billion Steel Mill in Mariupol
- Zelenskiy: $9 billion For Roads
- IFIs Loan $130 million to SMEs
- Germany Mulls Compensating Ukraine for Lost Gas Transit Fees
- ‘Big Construction’ Money Pours Into Zelenskiy’s Hometown
Metinvest plans to build a $1 billion modern cold rolling mill at its Ilyich Metallurgical Plant in Mariupol, Yuriy Ryzhenkov, the company CEO announced to Ukraine 24 TV. He said: “Literally next week we will sign a contract for the construction of a new cold rolling mill. This is already a billion dollar project at the Ilyich plant.”
The new mill would be a vote of confidence in Mariupol, a city located 30 km west of the front lines and a step toward Metinvest’s target: ‘carbon neutral’ by 2050. “This is the direction that we are going,” he said. “We have an idea to build a new plant based on hydrogen metallurgy.” Challenging Ukraine’s metallurgy to modernize, he said: “Today, we see an opportunity to declare, like the European Union itself, that we can be carbon neutral by 2050. This is absolutely real for Ukraine, for Ukrainian steelmaking.”
President Zelenskiy plans to spend $9 billion during the three remaining years of his term to rebuild and repair 43,000 km of national roads and 119,000 km of local roads, reports the Finance Ministry. The expenditure in critical infrastructure is included in the Budget Declaration for 2022-2024, which was approved last week by the Cabinet of Ministers. Denis Ulyutin, Deputy Finance Minister, said: “Thanks to this, the number of road accidents should be reduced by about 7%.”
The Infrastructure Ministry plans to install 50 more weigh-in-motion devices this year, raising to 100 the number of the systems designed to catch overloaded trucks. The Rada approved a law allowing automatic recording of overloaded trucks, eliminating the possibility of drivers paying roadside bribes to highway inspectors. With each device costing about $1 million, the system is designed to protect roads built under the government’s ‘Big Construction’ program.
In Kyiv, 60 roads will be repaired by year-end, Mayor Vitaliy Klitschko tells Radio Free Europe. Promising to create 100 km of new bicycle lanes this year, he said that no road will “be put into operation without modern sidewalks, without bike lanes, without modern lighting and video surveillance.”
To speed construction of Kyiv’s 150 km Bypass Road, the Rada passed a bill exempting the $3.2 billion project from ProZorro procurement and public tenders, Max Nefyodov, a Kyiv City Councilman and former deputy Economy Minister, charges in an Atlantic Council blog. Under the headline “Ukraine’s post-2014 public procurement progress is under threat,” Neyodov argues: “This recently adopted amendment sets an awful precedent that could pave the way for further exemptions of other major construction projects from Ukraine’s public procurement laws and regulations.”
Defending the measure, Serhiy Bykov writes on Facebook: “Current procurement rules close the opportunities for international players to enter the market, which can immediately bring money.” The new, streamlined approach, he said is “the international format of EPC + F contracts” or engineering, procurement, construction + financing. So far, non-binding memorandums have been signed with two foreign construction giants with access to international financing – Bechtel of the US and Poly Changda Engineering Co. of China.
International development banks are lending a total $130 million to two Ukrainian state banks which will provide finance for small and medium enterprises. The EBRD approved a loan of up to €25 million to ‘green-focused’ projects of SMEs. The World Bank is lending $100 million to Ukreximbank for it finance program supporting export oriented SMEs, Yevhen Metzger, CEO of Ukreximbank, wrote on Facebook.
A international standard stock market and commodity exchange – NEXT-UA – is the goal of a Memorandum of Understanding signed by the Cabinet of Ministers with EBRD, USAID, and AmCham Ukraine. “NEXT-UA will facilitate the integration of Ukraine’s markets into the international ecosystem, improve price discovery for commodities and provide hedging mechanisms for businesses in the form of transparent markets for capital, energy, agriculture and other sectors,” reads a release by the American Chamber.
Prime Minister Shmyhal said: “The stock market is one of the best tools for leveraging domestic and foreign investment in the real sector of the economy.”
The National Bank of Ukraine approved Gerhard Bösch to be Chairman of state-owned PrivatBank. Bösch, an Austrian financier, comes to the helm of Ukraine’s biggest and most profitable bank after 15 years at Raiffeisen Bank Aval, the Ukrainian unit of the Austrian bank. During his three-year tenure at PrivatBank, he is to prepare the bank for privatization.
Naftogaz CEO Yuriy Vitrenko met in Washington with key US Congress members to argue for sanctions to block the opening of the Russia-Germany Nord Stream 2 gas pipeline. Separately, US Secretary of State Antony Blinken told the House Foreign Affairs Committee that the Administration is talking to Germany about reimbursing Ukraine for lost transit fees and about establishing a pipeline cutoff mechanism if Russia moves against Ukraine. “I think it is necessary to ensure that the transit fee that Ukraine may at some point in the future lose as a result gas pipeline…was reimbursed,” Blinken said, according to Radio Free Europe.
Windrose Airlines launches regular flights to its 12th domestic destination, Kryvyi Rih, hometown of President Zelenskiy. “Today, flights of Ukrainian airlines are opening to Kriyvyi Rih, where planes have not flown for a long time,” Zelensky said after flying on a Windrose ATR 72 regional turboprop.
By the end of next year, a $35 million renovation of the airport’s runway and terminal should be finished, Kyrylo Tymoshenko, Deputy Presidential Chief of Staff, wrote on Facebook after landing. Serving Kryvyi Rih, a city of 600.000 and part of the Dnepropetrovsk and Kirovograd regions, the airport terminal will be able to process 400 passengers an hour. Kryvyi Rih is one of the 16 regional airports undergoing upgrades in an effort to restore domestic aviation.
‘Big Construction’ money is pouring into the President’s hometown. In addition to road improvements, projects include: renovation of Metallurg Stadium to seat 20,000 spectators; renovation of Spartak youth stadium to seat 7,000 people; construction of a $10 million municipal swimming pool; and construction of a new, high speed tram line.
Radisson opened its fourth hotel in Ukraine – Radisson Hotel Odesa City Centre on Derybasivska Street. Radisson has rebranded the existing Milano, rebuilding it ‘in a soft Scandinavian style.” The hotel offers 90 rooms, a conference space for 85 delegates, and a quiet restaurant in the hotel’s interior courtyard. In Ukraine, Radisson also has two hotels in Kyiv and one in Bukovel.
- Biden Invites Zelenskiy to White House
- Global Food Prices up 40%
- Climate Change Threatens 2/3 of Ukraine’s Farmland
- Work Starts to Revive Soviet-era Irrigation
President Biden has invited President Zelenskiy to visit the White House next month. The two leaders spoke in advance of two critical meetings that are scheduled for this week. Next There will be a NATO heads of government meeting in Brussels. Ukraine has not been invited as an observer. Two days later, on June 16, Biden and Vladimir Putin meet in Geneva for their first one on one summit.
Biden will “stand up firmly for Ukraine’s sovereignty, territorial integrity and aspirations,” US National Security Adviser Jake Sullivan told reporters about the meeting with Putin. In an interview with Axios, Zelenskiy asked for a meeting with Biden, complaining about Biden’s decision last month to stop trying to block the Nord Stream 2 Russia-Germany Baltic gas line. “This is a weapon, a real weapon…in the hands of the Russian Federation,” Zelenskiy said. “It is not very understandable…that the bullets to this weapon can possibly be provided by such a great country as the United States.”
The Secretary of State, Antony Blinken, has told a US Congressional committee that Nord Stream 2 is a “fait accompli.” Referring to worries that this Ukraine bypass pipeline will free Russia to attack Ukraine, Blinken told the House Foreign Affairs Committee: “We have agreements in place, upfront, to come back on any activities by Russia that are challenging the security or economic security of any of those countries.” Russian officials say the $11 billion; 1,230 km pipeline is 95% complete and will be ready to carry gas this fall.
“For the German government it remains central that Ukraine should remain a transit country even after Nord Stream 2,” German government spokesperson Steffen Seibert said to reporters. Referring to the Russia-Ukraine gas transit pact that expires at the end of 2024, he said: “We would like the option when it is extended.”
In contrast, Norbert Röttgen, Chairman of the Bundestag’s Foreign Affairs Committee, tweeted: “#Putin blackmails #Ukraine before #NordStream2 has even been finished. He uses the pipeline as exactly the kind of weapon, the Poles, Balts and Ukrainians have always believed it to be.”
Ukraine’s Internal Affairs Minister Arsen Avakov predicted that after the launch of Nord Stream 2 Russia could sabotage the pipeline to justify stopping gas transit across Ukraine. Avakov told reporters: “We expect that there will be provocations, attempted terrorist attacks on our section of the gas pipeline. And then they will say: ‘Look, you see, that is why we transport it through Nord Stream 2.’” Ukraine’s Foreign Minister Dmytro Kuleba arrives in Berlin for two days of talks with German officials.
Global food prices increased by 40% yoy, reported the Food and Agriculture Organization of the United Nations. After a 5% jump in May over April, the FAO Food Price index increased by 121.7 points, just short of a record high hit a decade ago. In Ukraine in April, prices of eggs increased by 90% yoy, vegetable oil increased by 63%, and the price for sugar increased by 65% yoy.
Concorde Capital’s Evgeniya Akhtyrko wrote: “The recent growth of global food prices is mostly attributed to increasing demand driven by a massive throwing of public money for pandemic fighting around the world. The recent acceleration of consumer inflation in Ukraine was mostly the result of food prices growth, and the global growth of food prices was definitely a factor.”
China’s growing appetite for wheat and soybeans, a severe drought in Brazil, growing demand for vegetable oil for biodiesel, and supply chain disruptions caused by the pandemic were cited last week by the Financial Times as reasons for rising food prices. “The drought in Brazil turned out to be worse than everyone expected,” FAO senior economist Abdolreza Abbassian tells the FT. “Therefore, it remains to pray that the weather in the United States is good.”
Two thirds of Ukraine’s farmland is at risk of drought due to climate change, Ukraine’s Agriculture Minister Roman Leshchenko told the Ukraine 30 Ecology forum. “Climate change is taking place and in fact two thirds of our territory is becoming a zone of risky agriculture,” he said. “Especially critical points are July-August.” Farmers should shift to low till, low chemical techniques that use harvesters that shred crop residues, returning them to the soil. Six million hectares, largely in southern Ukraine, urgently need conservation, he said.
Ukraine’s Soviet-era irrigation system has largely collapsed, according to an explanatory note accompanying a Rada bill to allow farmers to create water cooperatives. In 1990, the last year of the Soviet Union, “hydraulic reclamation” was carried out on 23 million hectares of farmland in Ukraine. Last year, the figure was 551,000 hectares.
Of Ukraine’s 41.5 million hectares, 57% need some form of irrigation. The bill’s note says 18.7 million hectares need constant irrigation and 4.8 million need periodic irrigation. Expected to pass this year, the bill would break the state monopoly on setting water rates, but retain state ownership of major canals. The bill would protect the investments made by farmers in leased land.
After last year’s drought caused up to $4 billion in crop losses to southern farmers, the Agriculture Ministry is launching a pilot project to restore irrigation systems in Odesa, Kherson, Mykolaiv and Zaporizhia regions. Minister Leshchenko writes on Facebook: “We will rebuild and expand reclamation systems with private and public capital.” Two weeks ago, land reclamation responsibilities were returned to the Ministry of Agriculture.
In Odesa alone, the government is spending $92 million this year in a crash effort to restore irrigation. If the Rada passes the irrigation bill, Leshchenko tells the Kyiv Post he expects the EBRD and the World Bank to loan Ukraine $2 billion to rebuild its irrigation systems.
Investing in a timber industry for future generations, President Zelenskiy announced at a national ecology forum a goal to plant 1 billion trees over the three years remaining in his term. Recently, Ukrainians carried out a national campaign, planting 1 million trees in 24 hours. To plant 1 billion trees, it would be necessary to plant 1 million trees every day for three years. On a more realistic note, President Zelenskiy signed into law a ban on conventional plastic bags, effective next Jan. 1. Stores are to switch to biodegradable bags.
- Turkey Boosts Black Sea Gas Discovery by 33%
- Ukraine Exports Fewer Tons, Earns More Dollars
- Used Car Imports Jump 45%
Germany will invest €8 billion in 62 major hydrogen projects, reports the Green Deal service of Interfax-Ukraine. “We want to become the world leader in hydrogen technology,” Peter Altmeier, Germany’s Minister of Economy and Energy, said. German officials are speaking with their Ukrainian counterparts about producing industrial quantities of hydrogen in Ukraine. Conceivably, Ukraine could use its existing east-west pipeline network to ship hydrogen to the EU.
Ukraine should start working with Poland to integrate gas pipelines and free itself of its dependency on Russian gas, Bartosz Cichocki, Poland’s Ambassador to Ukraine tells Glavcom news site. Ukraine stopped buying gas from Gazprom in November 2015 and buys Russian gas through intermediaries. Noting that Poland will stop buying gas from Gazprom after next year, the Ambassador said: “We are ready to help your country also become independent of Gazprom. It seems to me this option has no alternatives, because, if Nord Stream 2 starts operating, Russia does not have enough gas to sell through a pipeline running through Ukraine.”
Foreign gas traders are keeping 4.4 bcm in Ukraine’s underground gas storage facilities – double the amount of this time last year, reports Ukratransgaz. With Ukraine’s duty free warehouse regime gaining wider acceptance amongst EU companies, foreign-owned gas now accounts for 28% of the 15.5 bcm currently stored in Ukraine. Over the summer, when prices are low, the reservoir system is expected to fill to close to its 30 bcm total capacity.
Smart Energy plans to invest $400 million in gas production over the next decade, Serhiy Hlazuno, group CEO told reporters. During this time, the group plans to drill 30 wells. At present, it has 29 operating wells. Last year, Smart Energy increased its natural gas production by almost 9% yoy to 400 million cubic meters.
Turkish President Recep Tayyip Erdoğan announced the discovery of 135 bcm of natural gas at its Amasra-1 offshore well, increasing the known size of its Sakarya gas field by one third, to 540 bcm. Turkey consumes about 50 bcm a year. Ukraine consumes about 30 bcm. This summer, Ukraine’s Naftogaz plans to start seismic surveys in an offshore Black Sea block, near Romania and the mouth of the Danube.
Ukraine is exporting less, for more money:
Exports are up by 25%, or almost $5 billion, for the first five months of this year, Prime Minister Shmygal writes on Facebook. Exports to China, Turkey, UK and US were up almost 50%, compared to January-May 2020. By contrast, exports of goods during the first quarter were up only 12% yoy, to $13.7 billion.
Measured in tons, export cargo was down 18.6% to 43 million tons, for the first five months of this year, compared to the same period in 2020, reports Ukrainian Sea Ports Authority. Handling of ore dropped 14%, to 15.7 million tons. Handling of grain was down 33%, to 14.6 million tons. Food and metals prices are at 10-year highs.
Maersk, the world’s largest container shipping line, plans to stop calls to Chornomorsk port after August 10, the company says, citing “our network optimization exercise.” Three years ago, the Danish shipper stopped visiting Odesa. Now, Maersk will concentrate on Pivdenniy, Ukraine’s busiest port. Previously known as Yuzhny, this port has Ukraine’s fastest growing container terminal, TIS.
Registrations of used imported cars were up 45% for the first five months of this year, compared to January-May 2020, reports Ukravtoprom, the vehicle industry association. Used imports total 159,500 so far this year, four times more than new imports.
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