Ukrainian gas transit system operating 'smoothly' in high-security mode: GTSOU

Ukraine's state-owned gas grid operator GTSOU said Feb. 24 that its network was operating "smoothly" in high-security mode and that it was meeting all its customer obligations in full.

"We are closely monitoring the situation," the company told S&P Global Platts.

European gas prices made huge gains in early trading Feb. 24 after Ukraine said Russia had launched an invasion of the country.

The TTF March price rose by as much as 35% early Feb. 24 and was up by 28% at Eur114/MWh ($128.17/MWh) as of 0830 GMT.

Along with the geopolitical implications of the escalation, the European gas market is concerned over potential disruption to Russian gas deliveries to Europe amid low storage stocks.

"As of 1000 (0800 GMT) on Feb. 24, GTSOU facilities are operating smoothly and in high-security mode," it said.

"The company fulfills all its obligations to transport natural gas to customers in total," it added.

Factbox: Crude prices climb as Russia 'invades' Ukraine

Gazprom supply

Earlier Feb. 24, Russia's Gazprom also said its shipments of Russian gas via Ukraine to Europe were uninterrupted.

"Gazprom is supplying Russian gas for transit via Ukraine as normal, in line with requests from European consumers," the company said in a statement.

It added that deliveries on Feb. 24 were set at 83 million cu m/d, a 31.4% increase on Feb. 23.

A total of 41.6 Bcm of Russian gas transited Ukraine to Europe in 2021, accounting for around 10% of European demand.

There remains a risk that Ukraine's vast pipeline network that carries Russian gas to Europe could be exposed during military action.

Under transit arrangements finalized in December 2019, Russia's Gazprom agreed to transit 65 Bcm of gas via Ukraine in 2020 and 40 Bcm/year in the period 2021-2024, well down on a recent transit peak of 94 Bcm in 2017.

The agreement is under ship-or-pay terms, meaning Gazprom must pay Ukraine for the 110 million cu m/d of transit whether it ships the full volume or not.

Gazprom can also book more capacity on a short-term basis, but has not been buying significant additional capacity.