Ukraine sold its own gas at export auctions for the first time since the invasion began
On October 15, the first exchange auctions since the start of the full-scale Russian invasion were held in Ukraine to sell natural gas of Ukrainian production for export. Gas production companies sold the entire offered volume of fuel with a total value of about €9.36 million.
This was reported by the Ukrainian Energy Exchange (UEE). Details of the auctions were also published by the industry publication ExPro.
The auctions were held in a specialized section “Export of natural gas of own production.” Four Ukrainian companies offered a total of 135,706 MWh of gas, which corresponds to approximately 12.75 million cubic meters.
According to the results of the auctions, the entire offered resource was sold. The weighted average price was €69.01 per MWh excluding VAT.
All four companies that participated in the sale are part of the DTEK group. The largest volume was sold by PrJSC “Naftogazvydobuvannya” – approximately 7.78 million cubic meters.
The remaining gas was sold by LLC “Naftogazdiya,” LLC “Naftogazgeorozvidka,” and LLC “Kosul.”
The starting price of all four lots was €87 per MWh. During the auction process, it decreased by about 21% – to €69–69.03 per MWh.
Despite the decrease from the starting price, the exported gas was sold significantly higher than its price on the domestic market of Ukraine.
According to ExPro calculations, the export price is equivalent to approximately UAH 37,000 per thousand cubic meters excluding VAT. At the same time, Ukrainian gas on the domestic market trades at approximately UAH 19,600 per thousand cubic meters.
Thus, the export price turned out to be about 89% higher than the domestic price. However, this is a comparison of prices in different market segments, not an indicator of the net profit of gas production companies.
When gas will start being supplied abroad
According to the terms of the exchange auctions, the transfer of gas to buyers is planned on the Ukrainian-Polish border in the period from October 26 to December 31, 2026.
All lots provide for 100% prepayment. However, actual delivery will occur only after sellers receive the relevant export licenses.
Therefore, the results of the auctions confirm the sale of gas for further export, but do not yet mean that the resource has physically left Ukraine.
Ukraine partially resumed gas exports
The sale became possible after the decision of the Cabinet of Ministers of October 7, by which the government allowed partial export of natural gas of Ukrainian production.
Since the beginning of Russia's full-scale invasion in 2022, the export of gas of own production remained prohibited.
The new mechanism provides that gas production enterprises may sell up to 15% of the volume of gas transferred by them to the gas transmission system of Ukraine during the previous month for export on a monthly basis.
The relevant procedure is in effect from March 1 to November 30. The list of companies allowed to export gas and their individual limits is approved by the Ministry of Energy.
Only non-resident companies may act as buyers at specialized exchange auctions.
One of the reasons for the partial resumption of exports was the surplus of gas in the commercial segment of the Ukrainian market amid a decline in industrial consumption. At the same time, natural gas prices in Europe significantly exceed Ukrainian prices, which creates additional opportunities for domestic producers.
For private gas production companies, entering the export market opens up opportunities to receive additional revenue, in particular for financing production, restoration and protection of energy facilities.
Based on materials: Ukrainian Energy Exchange, ExPro – auction results, ExPro – government decision on resumption of exports.