Ukraine foreign gas storage injections exceed expectations, operator

Author: Aura Sabadus


LONDON (ICIS)--Foreign companies storing gas in Ukraine could inject as much as 2.5 billion cubic metres (bcm) by October, more than twice operator Ukrtransgaz’s initial expectations, a company source told ICIS on Thursday.

As many as 32 non-resident companies had injected 1.3bcm in the country by 31 July since April. This represents 8.3% of the currently stored volumes in Ukraine’s 12 storage facilities.

The Ukrainian sites are now half full, with volumes hovering around 16bcm.

Overall imports from Hungary, Poland and Slovakia rose to the technical maximum capacity, reaching a record 66 million cubic metres (mcm)/day on 21 July. Daily injection rates have been hovering within the 70-80mcm/day range, almost double last July’s average.

The initial target set by Ukrtransgaz for the volume of stored gas by non-resident companies was 1bcm by the beginning of the new gas year on 1 October.

However, companies were incentivised to inject gas in Ukraine after the country launched a customs warehouse regime, which enables traders to store gas for 1,095 days without customs clearance.

Falling gas prices on neighbouring hubs and inside Ukraine have also triggered buying interest. ICIS has assessed prices at the Ukrainian virtual trading point (UAVTP) and at the border at a combined monthly average of €14.40/MWh in July.

Concerns of gas interruptions during the upcoming winter also fed into injection demand. Traders fear supply curtailments as Russia’s transit contract with Ukraine’s Naftogaz is coming to an end this year.