In many ways, 2021 became a turning point for the global gas market. In an interview to Zn.Ua, Andrii Kobolev suggested two scenarios for 2022 – pessimistic and optimistic.

Among the main events for the gas market, Kobolev called the recovery of the global economy, conscious refusal from coal and transition to methane, and the completion of Nord Stream-2.

‘These factors are the main reasons for the rapid rise in natural gas prices in Europe, caught between hammer and anvil: hammer – increasing global demand, anvil – a tactic to minimize the volume of pipe gas exported to the EU, which Gazprom started in the summer of 2021. The combination of these factors led to record high prices at European gas hubs’, said Kobolev.

Making a forecast for 2022, Kobolev mentioned main factors, which will influence the situation:

– gas reserves in Ukrainian storage facilities will be lower than 14 billion cubic meters;

– domestic consumption will reach 180 million cubic meters per day;

– domestic production will remain unchanged at 55 million cubic meters per day;

– Ukraine’s state gas operator has financial deficit and can attract funds to cover it only from the state.

 

Given that Ukraine will need significant gas imports in the first quarter of 2022 to cover peak winter loads caused by low temperatures, the main factor determining the situation on the Ukrainian gas market will be the amount of losses suffered by the state during this period.

The former head of ‘Naftogaz Ukrainy’ suggests two possible forecasts – pessimistic and optimistic.

The pessimistic one is that ‘Naftogaz’ will not be able to provide sufficient gas imports. In this scenario, Ukraine will face the inevitable withdrawal of Russian gas from the transit stream.

In this case, Russia may suspend gas transit through the territory of Ukraine and terminate the current transit contract. Most likely, this will lead to the launch of Nord Stream-2 and Gazprom’s refusal to use the Ukrainian transit system.

According to the second scenario, ‘Naftogaz’ will be able to ensure sufficient gas imports. It is difficult to predict the price of such imports, but ‘Naftogaz’ will have to buy at any price, so Ukraine will have to find between $ 2 and $ 6 billion to support the state-owned company.

‘I can only hope that the weather conditions will be favorable for us, and we will see the optimistic scenario’, Kobolev concluded.

 

It should be noted that in response to ‘Bukvy’ information request in November 2021, the state gas operator informed Ukraine has enough gas reserves for the heating season.

In December, the energy ministry reported coal shortages at power plants.