Ukraine will reduce natural gas purchases from the European Union as a drop in oil prices and the removal of export tariffs cut the price of Russian fuel, according to state-run company NAK Naftogaz Ukrainy.
Imports through Slovakia may decline by about 30 percent from January levels and flows from Poland and Hungary could halt, Yuriy Vitrenko, managing director of international business at Naftogaz, said in an interview at the Flame gas conference in Amsterdam. Ukraine was using maximum capacity from Slovakia earlier this year as Russian prices were higher.
A 46 percent decline in oil prices since June is starting to filter into long-term European gas contracts, which are usually indexed to crude with a six- to nine-month lag. The extension last month of a winter package brokered last year by the European Union also means cheaper Russian gas, with the export tax removed, he said.
“We don’t need to buy as much gas from the West as we needed to buy, for purely commercial reasons,” Vitrenko said Wednesday. “Now we have some flexibility, and every time I negotiate with suppliers, they understand that if the price is not attractive I won’t be buying volumes this month or maybe even next month.”
