Ukrainian gas import from EU overshadows re-export in 2021

London — Ukrainian natural gas imports from the European Union were greater than volumes re-exported from storage in the first two months of 2021, the latest data from network operator GTSOU has indicated.

While much has been made of Ukrainian integration with European gas markets, and the ability of European shippers to store volumes in the country for later extraction and re-delivery, only a small proportion of total stored inventory has been sent back.

The data showed that a total of 433 million cu m was re-exported to the EU over January-February. This was below the aggregate import from the EU of 468 million cu m.

Out of the total re-export, 61.8% was delivered into Hungary, 25.8% into Poland, while the remaining 53 million cu m was delivered to Slovakia.

Discounted transport in "short-haul mode," whereby shippers who book point-to-point transport from the EU to storage receive a cost discount when simultaneously booking the return journey, made up 77% of total re-export, although this amount was not split into locations.

"The service was used by 18 traders... two Ukrainian companies and 16 foreign ones," GTSOU said.

On the import side, volumes were dominated by a Hungarian export of 403 million cu m, while Poland and Slovakia supplied 19.4% and 13.9%, respectively.

"Almost all of the gas was directed for use in the domestic market of Ukraine," GTSOU said, while adding that 86% of imports were performed using "backhaul mode;" a virtual reverse flow against the physical flow direction of the border interconnection.

Imports were carried out by five Ukrainian and 13 foreign companies, it said.

Previously released data from GTSOU indicated that 10.1 Bcm of gas had been stored by foreign companies under the "customs warehouse" regime in 2020, whereby shippers can store foreign-sourced volumes in Ukraine for up to three years exempt from customs duty.

February re-exports made up 199 million cu m of the overall total, representing a 15% drop month on month. Meanwhile, February imports from the EU came to just 29 million cu m.

GTSOU attributed this to "the high load of underground gas storage facilities both in the EU and in Ukraine," adding that "the statistics are influenced by the fact that February is a shorter calendar month."

According to Ievgen Todorov, GTSOU's commercial director: "Suppliers and traders who injected gas into Ukrainian underground storage facilities in the customs warehouse mode and using the short-haul service during the summer use their own reserves. This is a favorable time for this, as prices on energy exchanges are much higher than in summer."

"Moreover, customers continue to store gas in Ukraine. This indicates that the Ukrainian gas infrastructure is already part of the EU energy system, and we are deepening further integration with Western markets," Todorov added.