Ukraine’s lack of perspective

Ukraine needs foreign investment, particularly in the energy sector – this mantra is repeated time and again by the authorities. Proven natural gas reserves of more than 1 trillion m³ and government plans to boost gas production to 27bn m³/yr in 2020 from the current 19.9bn m³/yr should draw the eye of investors. The obstacle is decisions made this week in parliament that militate against a healthy investment environment in the sector.

Parliament’s tax committee rejected a draft law to decrease subsoil taxes for gas producers for new wells to 12pc from a current 28pc of the price of gas sold. The decision was a bitter blow to gas producers who lobbied for the new tax rates over several months. “We failed to prove for foreign investors that Ukraine is a good place to invest in gas production and we are left on the world map as a country with one of the highest tax rates for gas production”, said head of Ukraine’s association of gas producers Daniel Maydanik. The tax committee argument that there might be a loss of state revenues was weak, given that producers asked for low rates only for future wells. Besides, the committee approved a drop in tax rates for crude production that will lop 2bn-3bn hryvnia ($76.5mn-$114.8mn) off the 2017 budget.  Continue reading

Gas-less shrugged

After years of trying to bring more natural gas to New England, the industry may finally have run out of ideas.

Since 2013 utilities and pipeline companies has tried to bring lower-cost shale gas into parts of New England with the highest gas prices in the US. It was envisioned that local electric utilities in multiple states would sign long-term contracts needed to support the construction of new pipelines and ensure less expensive fuel for merchant power plants. This included projects such as Spectra Energy’s Access Northeast pipeline and Kinder Morgan’s Northeast Energy Direct project.

But unfavorable court rulings and regulators finding fault with the approach have left the idea in tatters. The latest blow came when Connecticut regulators last week canceled a request for proposals related to the initiative. Massachusetts and New Hampshire have put their efforts on hold because of legal problemsContinue reading