Ukraine plans emergency measures to secure winter gas supply: Zelensky

Ukraine will suspend any natural gas shipments overseas and will accumulate all domestically produced gas as part of emergency planning ahead of the country's "most difficult winter" since 1991, Ukrainian President Volodymyr Zelensky said June 7.

The comments shed light on how Ukraine plans to survive the winter following Russia's invasion of its western neighbor in February.

"Whatever the occupiers plan, we must prepare for the next winter," Zelensky said.

The comments came after Zelensky led an emergency meeting between senior government officials and state-owned energy companies and regulators aimed at preventing an energy crisis and to secure sufficient supplies of gas in Ukraine ahead of the winter.

"Now we will not have to sell our gas and coal abroad," Zelensky said. "All domestic production will be directed to the domestic needs of our citizens."

Zelensky also urged the government to allocate funds within the next several months for repairs to heat producing assets damaged by Russian military strikes over the past three months.

"We must go through it so that our people feel the normal work of the government," Zelensky said.

Storage stocks

Ukraine produced 19.8 Bcm of gas in 2021, down from 20.2 Bcm in 2020, according to the energy ministry. It also held significant volumes of gas in storage owned by European gas traders.

Prime Minister Denys Shmyhal said June 7 that Ukraine would seek to accumulate 19 Bcm of gas ahead of the six-month heating season that begins Oct. 15.

He said Ukraine has been making some progress in building up gas reserves over recent months due to the fact that most of the economy was shut down in March and April due to the Russian invasion.

Ukraine had 10 Bcm of gas in its underground gas storage facilities as of June 1, up from 9 Bcm as of early April when the government ended the centralized heating season.

Current stocks are 7.5% above the 2014-2018 average.

Last year, Ukraine entered the heating season with gas reserves at 18.87 Bcm as of Oct. 5, 2021.

Concerns over storage levels more generally in Europe have kept gas prices at sustained highs in recent months.

The TTF month-ahead price was last assessed on June 7 at Eur79.40/MWh, almost 210% higher year on year, according to Platts assessments by S&P Global Commodity Insights.