Ukraine Could Allow Foreign Traders To Use Half Of Its Natural Gas Storage

Ukraine is ready to allow non-resident traders to use up to half of its natural gas storage capacity, the country’s Prime Minister Denys Shmyhal told national television on Wednesday.

Ukraine has 30 billion cubic meters (bcm) of underground storage capacity. As much as 12 to 15 bcm of this capacity could be allowed to be used by foreign traders to store gas, according to the prime minister.

In April this year, Oleksiy Chernyshov, chief executive of Ukrainian state oil and gas firm Naftogaz, told EURACTIV that “Right now, we are able to provide up to 10 bcm of storage” to Europe for the winter.

“I can guarantee that I can rent this empty space to European countries that can store gas in Ukraine. And when they need it, they can get it back to Europe,” Chernyshov said.

As of early October, foreign traders had raised the volumes of natural gas stored in Ukraine to 2.2 bcm, from 1.8 bcm in the middle of September, Chernyshov has said.

“Over the past day alone, we have received 14 applications from non-residents to pump gas into ... Ukrainian gas storage facilities,” Chernyshov was quoted by Reuters as posting on Facebook on October 6.

This year, despite risks of potential hits due to the war, traders have started to store natural gas at storage sites in Ukraine, taking advantage of the lower costs and high available storage capacity. The commodity can be bought anywhere and sent to Ukraine via reverse flows in pipelines from Hungary, Slovakia, and Poland. 

With the EU storage nearly full, Ukraine’s available capacity could help the bloc ease gas supply concerns ahead of the winter, Brussels-based think tank Bruegel said in an analysis in July. 

Ukrainian gas storage could help Europe’s security of supply, as the EU can use spare capacity in Ukraine to top up stored gas volumes for the coming winter, Bruegel said.

By Tsvetana Paraskova for Oilprice.com

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