Natural gas in Ukraine trades higher than in Europe for the first time in a year

Natural gas prices in Ukraine on Tuesday, April 29, exceeded European spot prices for the first time in nearly a year, according to ExPro Daily Gas.

According to ExPro Natural Gas Quotes, prices for the April resource (UA-VTP-CM) in Ukraine on Tuesday stood at approximately 19,150 UAH/tcm (including VAT), or €31.8/MWh, while Day-Ahead spot prices on the Dutch TTF were at €31.5/MWh.

This marks the first time since May 1, 2024, that natural gas prices in Ukraine have surpassed European gas prices, with the price spread reaching €0.4/MWh in favor of Ukrainian prices. The spread does not include the cost of gas transportation to Ukraine.

Causes of price changes

This situation is primarily due to recent market trends. Over the past week, natural gas prices in Europe have declined amid warm weather and a stable gas supply. Meanwhile, prices in Ukraine rose due to steady demand, including from state-owned companies such as Naftogaz and the GTS Operator of Ukraine. On the supply side, volumes shrank after Ukrnafta ceased gas sales on the market following the government's decision requiring it to sell gas to Naftogaz under the public service obligation (PSO) mechanism.

Natural gas imports

For now, the price spread between European and Ukrainian markets remains too narrow to revive commercial gas imports to Ukraine by private companies, as it does not cover transportation costs.

However, if the trend continues, traders may resume gas imports for resale on the Ukrainian market. Currently, all natural gas imports in April are being handled by Naftogaz of Ukraine, which has been importing 8.6 mcm per day in recent days.

As a reminder, Naftogaz estimates that Ukraine will need to import 4-4.5 bcm of natural gas by the start of the heating season. It is possible that, given a favorable spread, private companies could import part of this resource.

Where to find natural gas market analytics?

Detailed analytics of the natural gas market in Ukraine, including production, imports, exports, UGS reserves, trading results, natural gas prices, key news, etc., are published in specialized publications ExPro Daily Gas, ExPro Gas&Oil Weekly, and ExPro Gas&Oil Monthly.

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