6:18 AM Sunday, March 25, 2018 Monday, March 5
Gas crisis passes; Gas transit flows maintained to Europe; Maersk quits Odesa; New Privatization law takes effect;
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

Gas supplies are to be normal across Ukraine on Monday. Over the weekend, Slovakia, Hungary and Poland stepped in to fill a 10% supply gap caused by Russia’s abrupt cancellation of a supply contract on March 1. That was to be Ukraine’s first day of gas purchases from Gazprom since 2015. President Poroshenko tweeted Sunday: “The deficit is now completely covered." On Saturday, Ukraine’s imports of gas from Europe jumped 7-fold, from four to 29 million cubic meters.

In contrast to the Russian shutoffs of 2006 and 2009, gas deliveries to Europe and Moldova continued through Ukraine unchecked. Reverse flow pipelines and pipeline connectors built over the last decade allowed Europe to supply Ukraine with gas, most of it originally from Russia. Poroshenko told the national press on Saturday during a visit to the dispatching office of Ukrtransgaz: "We have fully provided transit of gas to the EU countries. The Russians hoped that Ukraine would start taking gas from transit. Keep dreaming! Ukraine is a reliable transit country, reliable state and reliable partner.”

Naftogaz paid Gazprom $125 million to receive 18 million cubic meters in March. In December, a Stockholm arbitration court ordered Naftogaz to buy up to 5 billion cubic meters of gas from Russia, at market prices. Naftogaz contracted with Gazprom by buy gas at $238.55 per 1,000 cubic meters. Today, spot market prices are above $250. Naftogaz plans to bill Gazprom for the 5% price difference and to cancel the larger purchase. Naftogaz says it now deems the Russian company an unreliable supplier.

As nighttime temperatures in some parts of Ukraine dropped to -21C, Ukrainians switched to electric heaters, causing a winter peak in electricity use in March. Nuclear power plants, source of half of Ukraine’s electricity, ran at full capacity, 11 GW. Power plants were switched from gas to oil, and heating was reduced.

Nationwide gas consumption decreased by 14%, or 25 million cubic meters, last weekend. Yuri Vitrenko, Naftogaz commercial director, wrote on Facebook that four cities cut their gas consumption by more than 20%: Mykolaiv – 21%; Kyiv – 24%; Dnipro – 32%; and Kremenchuk – 35%.

President Poroshenko signed a privatization law designed to streamline the process of selling most of the nation’s 3,000 state companies. Poroshenko said Friday: "Only strategically important enterprises should be preserved in state property." Calling for “fair, competitive and transparent privatization,” he said: “Foreign investors are given the opportunity to appeal to the laws of England and Wales until 2021, until the completion of judicial reform and the creation of new courts at all levels." Russian investors will not be allowed to bid.

Ukraine would become one of four sites worldwide for manufacturing small modular nuclear reactors designed by Holtec International, under a memorandum of understanding signed last week by Energoatom and the US-based company. World Nuclear News reports:The Ukrainian manufacturing hub is to mirror the capabilities of Holtec's Advanced Manufacturing Plant in Camden.” Holtec also would make in Ukraine components for the reactors, the SMR-160. Yury Nedashkovsky, Energoatom's president, is a member of the Holtec Advisory Council. Last November, Holtec started building near Chernobyl the Centralized Storage of Nuclear Fuel from Ukraine’s 15 nuclear power reactors.

The EBRD is loaning €25.9 million to the KNESS Group, a leading Ukrainian leading engineering and construction company, to build three solar power plants in Vinnytsia, the region 250 km southwest of Kyiv. Nearly, 350 people will work building the solar stations, which will have a total capacity of 34 MW.

Starting April 1, Maersk, the world's largest container shipping company, will no longer dock at Odesa Sea Commercial Port, according to Dumskaya, a local news site. In letters to clients, the Danish carrier offers two options - the Chornomorsk, 30 km to the southwest, or Yuzhne, 40 km to the east. Maersk does not cite its reasons for pulling out of Odesa. One year ago, USAID abandoned a custom reform project there after Yulia Marushevska, a Maidan activist, quit as head of Odesa Customs. She said that she was unable to fire corrupt customs officials.

A new “single window” customs clearance procedure is proving popular, accounting for 72% of all customs clearance of goods in February, the State Fiscal Service of reports. Of 158,000 customs declarations in February, more than 113,000 went through the single window.

Reni, Ukraine’s main port on the left bank of the Danube, is to see $1.5 million in investments over the next two years to create a high-tech complex for processing and transshipping organic grain. Located 300 km west of Odesa, Reni is seen as a shipping short cut to Europe, a region where organic food sales are growing fast. The complex will be built according to the standards of the Brussels-based Research Institute of Organic Agriculture, or FiBL. Raivis Vezkagans, head of the Sea Ports Authority, believes that complex could attract 80 – 90 new ships a year to the port, which borders Moldova and faces Romania.

David Pollack, CEO of Israel’s Spacecom, an operator of AMOS communications satellites made by Israel Aerospace Industries, held talks in Kyiv with Pavlo Degtiarenko head of Ukraine’s State Space Agency on creating a Ukrainian national satellite communications system. Ukraine’s satellite, the Lybid, has been stored in Russia since summer 2014. Ukraine asserts the satellite will be launched this November from Baikonur, the Russia-controlled space center in Kazakhstan.

BM Bank, a Ukrainian bank with Russian state capital, plans to close according to Financial Club news site. Shareholders plan to make the move at a March 19 meeting. On Friday, the National Security and Defense Council of Ukraine prolonged sanctions against four Ukrainian banks with Russian capital: BM Bank, Prominvestbank, Sberbank, and VTB Bank.

In the government-controlled half of Donetsk region, once a productive farming area, major road repairs took place last year, Pavlo Zhebrivsky, head of the regional administration, told reporters in Kramatorsk. Last year, five new asphalt plants were built, eight bridges were repaired, 52 kilometers of main roads were reopened, and 150 village roads were repaired.

By 2022, Ukraine’s roads will be good condition, Prime Minister Groysman promises on his Facebook page. He notes that last year, 2,177 km of roads were built or repaired, more than twice as much as the 928 km in 2016. He says this year a record $1.7 billion is to be spent on road repair and construction – more than double last year’s spending.

Poland’s Mirbud S.A construction firm aims to win EUR 50 million in road building contracts in Ukraine over the next two years, company director Marek Gola tells Interfax. Seeing work in Ukraine “for at least another decade,” Gola predicts his company will have an edge as Ukravtodor starts to require contractors to build according to standards of FIDIC, or the International Federation of Consulting Engineers. This selection procedure by Ukraine’s highway agency “will become a huge problem for many Ukrainian road building firms,” he predicts. Poland’s road agency “has already set such requirements for its contractors for many years.”

Infrastructure Minister Volodymyr Omelyan speaks Monday morning at the Invest & Trade in Ukraine Forum in New York City. Joining the infrastructure panel will be Igor Smelyansky, acting CEO, Ukrainian Postal Service, Ukrposhta, Viacheslav Andriyko, general director, Willis Towers Watson and Maria Barabash, president and CEO, A7 Group, the conference organizer. Participating in a second panel, on Energy, will be: Andriy Konechenkov, board chairman of Ukrainian Wind Energy Association, Ilya Ponomarev, founder of Trident Acquisitions, Andrew Pryma, UBJ investor and Myron Rabij, partner at Dentons Kyiv, the conference sponsor. The day long event will take place at Dentons office, 1221 Avenue of the Americas

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