Ukraine's DTEK starts gas coal deliveries from US

Ukraine's DTEK starts gas coal deliveries from US
By bne IntelliNews October 26, 2017

Ukraine's leading coal and power holding DTEK is going to obtain its first 150,000 tonnes of G-grade (gas) coal from the US to replenish the stocks in the warehouses of its thermal power plants (TPP) for the upcoming heating season, Interfax news agency reported on October 23.

This will reduce the gas coal deficit in Ukraine — a major coal producer — which arose as a result of increased electricity supply from TPPs operating on gas coal due to a blockade and the loss of anthracite mines in rebel-controlled territories in the Donbas region.

According to the company, the first bulk carrier with 75,000 tonnes of coal from the US for the Ladyzhyn and Zaporizhia TPPs is expected to arrive in Ukraine this week.

DTEK said the growth in demand for gas coal in Ukraine is also caused by the transfer of anthracite blocks at Ukrainian TPPs to work on gas. From September Zmiyevska TPP started using gas coal, while from November two blocks at Prydniprovska TPP will operate on gas coal as well.

The blockade of railway connections with the eastern Donbas region started in late January and intensified in recent days. A full blockade would mean a cut in the supply of anthracite, which is not mined in the government-controlled part of Ukraine, to some Ukrainian power plants. Of 12 thermal power plants operating outside rebel-held areas, six were designed to burn anthracite and last year produced 12% of all electricity in Ukraine.

DTEK has been unable to deliver its coal across the demarcation line since February. As a result, the company is unable to deliver anthracite and lean coal (mined only in rebel-held areas) to its two power plants located in central Ukraine. It is also unable to deliver hard steam coal mined outside the conflict zone to the Zuyivska plant located in the rebel-controlled part of Donetsk region.

DTEK reported that it has switched the affected power plants to minimal working mode and has warned about possible equipment damage to the plants if they have to be fully shut down.

In August, Pennsylvania-based coal company Xcoal Energy & Resources signed its first contract with Ukraine's state-controlled power generation firm Centrenergo to supply 700,000 tonnes of steam coal in the coming months.

Centrenergo said the same day in a separate statement that the contract was signed to implement agreements between the presidents of Ukraine and the US reached during President Petro Poroshenko's visit to Washington in June. The first supply of coal of 85,000 tonnes will arrive in Ukraine in late September, while the price is $113 per tonne at a Ukrainian port.