Some EU firms resume Ukraine storage injections to clear supply overhang

Aura Sabadus


LONDON (ICIS)–Some EU-based companies have resumed gas injections in Ukrainian storage as hub prices have been falling and markets are facing a supply overhang, several traders told ICIS.

Non-resident companies suspended activities in Ukraine at the start of Russia’s war in February 2022, deterred by the military risk and the introduction of martial law by the Ukrainian government.

However, since the start of October, combined physical imports into Ukraine from Hungary, Poland and Slovakia rose to an average 7.6mcm/day compared to an average 3mcm/day since the beginning of the year, according to data by the gas transmission system operator, GTSOU.

EU companies as well as Ukrainian and Moldovan companies are rushing to take advantage of falling spot gas prices in Europe to buy more volumes ahead of winter.

As most European facilities are nearly full, they have turned to Ukraine, which has a storage capacity of 30bcm, half of which remains empty for now.

The spread between Ukrainian and import prices has almost converged on the spot, hovering around €54.00/MWh, traders said.

Meanwhile, the spread between the front month Ukrainian VTP price and the TTF equivalent assessed by ICIS has narrowed from a record €217.00/MWh UAVTP discount to the TTF at the end of August to €40.00/MWh in recent days.


Prices in Ukraine have been severely depressed by a 40% internal demand drop caused by war-inflicted infrastructure destruction but falling prices on European hubs are helping to bridge the gap.

Some traders say the injection rush may be short-lived because if demand increases in Europe and Russia decides to stop its transit via Ukraine and supplies to Moldova, hub prices would regain their premium, discouraging trading.

They also note that the possibility of further Russian attacks could deter companies from injecting gas in Ukraine, although they agree that following the reported sabotage of the Nord Stream pipelines, European transmission and storage infrastructure may also be at risk.


Andrii Gerus, chairman of the committee on energy, housing and utilities in the Ukrainian Verkhovna Rada told ICIS the parliament was preparing draft legislation to optimise gas storage in Ukraine. This may ultimately help further reduce tariffs and attract more companies.

Prior to the start of war there were around 800 Ukrainian companies and more than 100 non-resident outfits injecting gas in Ukraine’s facilities.

Ukraine sought to incentivise companies by offering comparatively cheaper tariffs and introducing a customs warehouse regime. Under this arrangement, companies can store gas without being asked to pay taxes or customs duties for three years.

However, after Russia invaded Ukraine on 24 February and the government was forced to introduce martial law which involved a temporary stop on the re-export of gas from storage, many non-resident companies halted operations.

Gerus said Ukraine, as a contracting party of the Energy Community, an international institution helping the country reform its energy markets, was working to ensure it fully aligns its storage policies with those of the EU.


The certification of the storage operator, UTG, as an independent company, is seen as a priority and likely to be passed before the end of the year, according to UTG.

This is in line with EU requirements for all operators across Europe to undergo mandatory certification to avoid the risk of external interference.

“Our strategic vision is to become a gas storage hub for Europe,” he said.

“We understand that in order to become such a hub, we must strictly adhere to our obligations. We must guarantee western companies that they can inject gas into storage facilities and withdraw it at any time,” Gerus explained.

He said the parliament had no plans to introduce restrictions on imports, storage or withdrawal and re-exports of gas stored in Ukraine by non-resident companies.

“For a short time, we stopped re-exports after the beginning of the full-scale Russian invasion of Ukraine, when it was difficult to predict anything. But these restrictions were quickly lifted . At the same time, the property interests of non-residents were not affected,” he said.


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