The Ukrainian energy sector regulator moved to cut tariffs charged at natural gas entry and exit points for 2019 to make its gas transportation system more competitive.
The system, which competes with Nord Stream and other Russian gas pipelines for alternative gas shipments to Europe, will begin charging new tariffs from January 1, S&P Global Platts reported.
The tariffs for all entry points will be reduced by 49.6% to $6.28 per 1,000 cubic meters for international shipments, down from $12.47/1,000 cu m, according to the commission.
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Since all exit points are at different distances from entry points, they will have different tariffs.
Lower tariffs will help Ukraine to reduce the price of imported gas in the domestic market by about $6/1,000 cu m in the wholesale market, head of the National Commission for State Regulation for Energy and Utilities, Oksana Kryvenko, said.
"The Ukrainian gas transportation system will strengthen its competitiveness as an absolutely more cost-effective alternative to Nord Stream and other bypass gas pipelines," Kryvenko said.
Ukraine, Russia and the European Union are preparing to hold in January 2019 a round of trilateral negotiation over natural gas transit agreement, and Kryvenko said cutting the tariffs will help Ukraine secure a "more beneficial transit contract" with Gazprom after the current contract expires by the end of 2019.
"Ukraine has again proved that it is a reliable and a promising partner," Kryvenko said. "It is necessary to win competition for investments and the workload of the gas transmission system."
