08/10/2015 Ukraine: Daily Highlights - The situation in the energy sector is very tense

The situation in the energy sector is very tense

08.10.2015 Daily Highlights by the Digests & Analytics Ukraine News Agency

Topics from Media and Social Networks

• The situation in the energy sector is very tense.
• Militants are moving military units and machinery to the front line.
• Negotiations of Ukraine and International Creditors Club will be held on August 12.
• The meeting of the aviation experts dedicated to investigation of the MH-17  flight  accident began on August 11 in the Netherlands.

Key Events in Ukraine

• The State Fiscal Service introduces the post of the Commissioner for Enterpreneurship (business ombudsman), and former Vice-President of the American Chamber of Commerce Kachka will take up this post.
• Ukraine increases the volumes of the natural gas injections into underground storage facilities to save up 19 billion m3 by October, in time for the heating season. Currently storage facilities contain more than 13.3 billion m3. The stocks are being replenished at a rate of 50 million m3 per day.
  Kyiv Economic Court dismissed the General Prosecutor's Office request to invalidate two contracts of sale of 11 billion m3 of natural gas between Naftogaz and Gazprom from 2009, owned by oligarch Firtash RosUkrEnergo company. Firtash abjudged the natural gas from Ukraine in the Stockholm arbitration with the assistance of Azarov government officials .
• Fuel and Energy Minister Demchishin said that the regional gas companies owned by Firtash, owe Naftogaz more than USD 4 billion for the delivered process gas.
• The 1st unit of Khmelnitsky Nuclear Power Plant with capacity of 1 GW was stopped for a scheduled maintenance. In general 10 units of TPP  out of 15 are running at the moment. Zmiivska TTP of the Tsentroenergo company was also stopped due to the lack of coal in warehouses. At Uglegorskaya TPP, located in the fighting zone, three units are running , and the same number of units are running at the Tripolska TPP. Slavyanska TPP coal reserves will last only till the end of the day. Ongoing contract deliveries are received from Russia on a permanent basis in a volume of 0.8 GW. Rolling blackouts are not yet applied.
  The Cabinet canceled its decision adopted in 2014 on stimulating the consumers of natural gas and thermal energy to transit for the use of electricity and on improvement of tariffs for population and other consumers.
  Fuel and Energy Minister Demchishin said that next year, as part of the diversification of  the nuclear fuel supply, over a third of it will be purchased from the Westinghouse American corporation . He also said that this year, the contract with "Gazprom" will be definitely signed, since it won’t be possible to guarantee the supplies of the natural gas in winter without the supplies from Russia. In his oppinion, the purchase price for the natural gas should not exceed $ 250 per 1,000 m3 until the end of the season, and will probably be lower. It is planned to receive the money for its  purchase from the World Bank.
• The police closed the criminal proceedings regarding the death of former MP and Head of the State Property Fund Chechetov.
• The fire in the exclusion zone of the Chernobyl Nuclear Power plant was localized in the forest area. Police suspects that the cause of the fire could be an arson.
• The Cabinet of Ministers announced two versions of Ukraine’s economic development  forecast for 2016. According to the optimistic forecast, the country's GDP is expected to increase by 12%, the pessimistic forecast tells about the GDP decrease by 0.3% and inflation rate at 14%. The IMF experts tend in their assessments towards the first option.
• On August 12 the Ministry of Finance is scheduled to meet with the International Creditors Club , the Club initiated it to solve the issue of the restructuring of the public debt of Ukraine. The official Ministry website placed a message, according to which this meeting is considered the last opportunity to reach an agreement before the payment on Eurobonds in September and October. In case of failure to reach a consensus, Ukraine will have to use the alternative methods of implementation of the IMF program, in particular, introduction of the moratorium on payments, towards  which the IMF has negative attitude but is willing to accept it. However, the leading Western agencies,  Bloomberg and Fitch Ratings, assess the prospects of reaching an agreement as optimistic and put the figure of 22.5% as mutually acceptable for writing-off the national debt of Ukraine.
• The official hryvnia exchange rate against the major currencies slightly decreased after the weekend: 21.26 UAH/USD (+0.17 UAH), 23.30 UAG/EUR (+0,30 UAH), 3.30 UAH/RUR 10.

Urkaine at War

• In the Donbass, the situation continues to deteriorate. Ukrainian army and the Right Sector units repulsed the night attack near Volnovakha, taking the predominating heights, but by night the militants resumed the shelling from heavy artillery. The situation is escalating in the area of Donetsk and Stanitsa Luhanska. According to the official reports, during the fighting one soldier was killed  and seven were wounded . However, according to the medical service of the Right sector, only during the battle near Novolaspa three volunteer and four  soldiers  of the Armed Forces were killed, five soldiers and six volunteers were wounded.
  At the evening, the shellings in Volnovakha direction resumed with the renewed vigor. Head of General Staff Muzhenko reported to President Poroshenko about the situation. It was decided to allow the fire back. The OSCE mission was informed about it.
  A sharp intensification of aerial reconnaissance of the Russian-terrorist forces was recorded along all the line of combat operations. Informants from the occupied territories reported on the moving of the equipment, including air defense and missile systems, and militants manpower from the basing locations and their transfer to the front line. The General Staff believes that there are about 10 thousand Russian troops in the  Donbass and about 50 more thousand are deployed on the border with Ukraine.
  According to experts, the attack on Volnovaha could be a diversion from the main strikes, which could be delivered in the directions of Maryinka, Artemivsk and Stanitsa Luhanska.
  Foreign Minister Klimkin informed Russian Foreign Minister Lavrov about abuse by the militants of the process of de-escalation in the Donbass. During the talks with the Foreign Ministers of France and Germany, it was decided to hold in the nearest time the  negotiations in the "Normandy format" to prevent the escalation of the conflict.

Ukraine and the World

• In the Netherlands, began a meeting of the aviation experts from seven countries, dedicated to the investigation of an MH-17 flight aircraft accident, where the draft final report of the Security Council of the Netherlands Commission on the causes of the disaster will be submitted. Publication of the report is scheduled for October.
• The US is ready to allocate additional $ 500 million for training of the Armed Forces and the National Guard soldiers at the Yavorivsky training area. US Vice President Biden confirmed the readiness of the US government to provide an additional loan of $ 2 billion, of which was agreed upon in April.