Ukrainian Prime Minister Arseniy Yatsenyuk’s overseas trip may turn out badly for Ukrainians as early as in autumn. After the gas market was liberalized in the country, U.S. will start making profit on it starting October. They have already began to sell gas to Ukraine for a higher price than Russia’s Gazprom. The difference in the prices sometimes accounts for almost 1/3 of the price – up to $132.
Riverstone Holdings LLC, a U.S. private equity firm, announced at the U.S.-Ukraine business forum in Washington, Monday, on July 12, that Trailstone Company has entered Ukraine’s gas market. Arseniy Yatsenyuk attended the event to find companies that, as he said, will make Ukraine’s economy more competitive and stronger. Experts anticipate exactly the opposite, they say Ukraine may be “fleeced of its money” again. TrailStone is a gas profiteer that, as Andrey Kobolev, the head of Naftogaz of Ukraine, said, already supplies gas to Ukraine. This has partially confirmed the unofficial data received from the Ukraine Customs Service concerning the real state of affairs with import of gas from Europe. Official information is not available. Ukrainian officials like speaking about gas reverse: they say gas from the Old World is cheaper and it will help Ukraine get energy independence. Both the Government and Naftogaz Company say the details of the contract are confidential and not subject to disclosure.
Meantime, according to the Customs Service, the European gas for Ukraine is not as cheap as it might seem. Dozens of companies – both big and popular ones and dark horses – supply gas to Ukraine. TrailStone is one of them. The company was registered as a legal entity in the EU just last year, but already actively sells gas to Ukraine. For instance, in March 2015, the Russian Gazprom supplied gas to Kiev for $329 per 1000 cubic meters. American companies have supplied gas to Ukraine already trice. The largest lots – 22 million and 66 million cubic meters of gas – cost Naftogaz of Ukraine $423 and $461 per 1000 cubic meter, respectively. It is by $94 and $123 higher than Gazprom’s prices.
To be fair, the smallest lot of 13 million cubic meters was sold to Ukraine for a price by $65 cheaper than the Russian one. In April, all the supplies of TrailStone were by $1-$52 more expensive. Kiev purchased 180 million cubic meters of gas then.
The American company entered the Ukrainian market, as the law liberalizing the gas market will come into effect in Ukraine in October. The law permits any company having a relevant license to sell gas along with the state Naftogaz of Ukraine. For the time being, the national company that is in charge of the gas supply to the country manages to scratch along due to its monopoly in the market. While the government has no idea how it would be covering the 100 billion hryvnias budget deficit of the current year, Gazprom halted gas supplies to Ukraine on July 1 as Kiev has no money to make prepayments.