Ukraine already seeing non-resident gas storage injections: UkrTransGaz

Ukraine is already seeing gas storage injections by non-Ukrainian companies after Kyiv offered the use of more than 10 Bcm of spare Ukrainian gas storage capacity this summer, operator UkrTransGaz said June 30.

In a statement, UkrTransGaz also said its priority remained security and maintaining robust safeguards for its gas storage sites.

EU gas storage sites are already 77% full, according to data from Gas Infrastructure Europe, and could top out well before the start of winter, bringing spare Ukrainian storage capacity into play.

Ukraine has a total of some 31 Bcm of underground gas storage capacity but it remains underutilized, with sites filled with around 10.6 Bcm of gas as of June 27, according to S&P Global Commodity Insights data.

"We have already started injecting gas for non-resident customers," UkrTransGaz chief Roman Malyutin said. "This year, UkrTransGaz is ready to inject more than 10 Bcm," he said.

Malyutin's comments come after a visit to one of the company's storage sites together with deputy energy minister Mykola Kolisnyk.

"In the conditions of war, our priority remains the issue of security. We are constantly strengthening the protection of our technological facilities," Malyutin said.

One of the measures taken to boost security is the provision of alternative modes of operation and additional backup power sources in the event of a crisis situation.

"We continue to provide alternative power sources to critical infrastructure facilities. We must be ready for any scenario," Kolisnyk said.

Last year, the energy ministry provided 69 electricity generators for UkrTransGaz facilities, he said.

Kolisnyk added that security of supply and increased operational efficiency between gas exploration, production, transportation and storage would boost the competitiveness of the Ukrainian gas market.

"This, in turn, will become the basis for full integration with the European gas market," he said.

Summer-winter spread

Earlier this month, grid operator GTSOU urged European traders to act "promptly" to make use of the country's storage capacity in order to take advantage of current gas market conditions.

"With the return of the spread between summer and winter gas prices on European markets, the attractiveness of using Ukrainian gas infrastructure in the 2023/2024 season is increasing," it said.

"To have time to take advantage of such conditions in the gas market, traders need to act promptly," it said.

Platts, part of S&P Global Commodity Insights, assessed the TTF Winter 2023 contract on June 30 at Eur49.95/MWh, a premium of Eur15.45/MWh to the TTF month-ahead price of Eur34.50/MWh.

Kyiv is also maintaining its "customs warehouse" regime, which allows European traders to store gas in Ukraine for 1,095 days without paying taxes and customs duties.

Ukraine's gas storage sites have been underutilized in recent years, though stocks were built to more than 28 Bcm in the summer of 2020 when European traders used the sites to store surplus gas amid the coronavirus pandemic.

Ukraine's gas stocks were built to only 14.5 Bcm ahead of the start of the 2022-23 winter, well below the target of 19 Bcm.