Ukraine's gas storage operator UkrTransGaz eyes more foreign capacity use

Ukraine's state-owned gas storage site operator UkrTransGaz hopes to continue to attract foreign market participants to make use of the country's vast gas storage capacity as part of efforts to expand international cooperation.

In a statement Feb. 4, UkrTransGaz said the company was also focused on strengthening Ukraine's position in the EU market.

Ukraine has a gas storage capacity of some 31 Bcm -- the largest in Europe -- and international companies have in the past made use of the country's spare capacity to store gas.

But Ukrainian gas storage sites were also targets of Russian missile and drone attacks in the spring of 2024, dampening the appetite of European traders to store gas in Ukraine over the summer.

A narrower summer-winter spread also made storage economics less attractive in 2024 compared with the previous year.

Storage efficiency

UkrTransGaz said Feb. 4 that international cooperation was discussed at a company meeting, "in particular attracting foreign customers to gas storage."

"In addition, the issue of increasing the production efficiency of gas storage facilities was considered," it said.

The company said interaction with foreign customers and integration into the European energy market remained priorities for 2025.

"Thanks to this, we increase competitiveness and expand the possibilities of using Ukrainian gas storage facilities," it said.

Foreign traders stored some 2.5 Bcm of gas in Ukraine's gas storage facilities in 2023, but in 2024 volumes dropped to negligible levels.

In November, the then head of state-owned Naftogaz, Oleksiy Chernyshov, said that non-resident companies had accumulated "ten times less" gas in Ukraine's storage sites in 2024 compared with 2023.

"Russian attacks have influenced the reputation [of our storage] and have an adverse impact on our capacity to store gas," Chernyshov said.

He said the stored gas itself was not under threat, but the attacks still had an adverse impact on the sector.

Ukraine's total gas stocks are also well down on last year's levels. However, on Jan. 31, Naftogaz doubled down on its message that it has enough gas in storage to last through the remainder of the winter.

In a statement, Naftogaz said there were enough supplies to get through the winter and that information spreading online about the alleged introduction of gas shutdown schedules across the country was "fake."

According to data compiled by S&P Global Commodity Insights, total Ukrainian gas stocks were at around 7.8 Bcm as of Feb. 2 compared with levels of some 10 Bcm at the same time in 2024.

However, some 4-5 Bcm of this is said to be cushion gas required for the technical operation of the sites.

Storage data published by Gas Infrastructure Europe showed working Ukrainian gas stocks at 34.4 TWh (3.2 Bcm) as of Feb. 3.

With its storage capacity of some 31 Bcm, current stock levels mean that working gas volumes in storage are now at just above 10% of capacity.

Ukrainian energy consultant and former CEO of gas grid operator GTSOU, Sergiy Makogon, wrote on LinkedIn on Jan. 30 that even if current reserves were able to carry Ukraine through the winter, it would likely emerge with "substantially depleted" gas stocks.

Makogon said that to prepare for the next 2025-26 winter, Ukraine could have to import up to 3 Bcm of gas.

Costly imports

Ukrainian officials said previously that the country aimed to rely solely on its gas stocks and domestic production to get through the winter.

Eliminating the need for imported gas was a key priority for Kyiv, especially given the high cost of gas in Europe.

Platts, part of Commodity Insights, assessed the benchmark Dutch TTF month-ahead price on Feb. 4 at Eur51.95/MWh.

Ukraine's total gas production rose in 2024 to 19.1 Bcm, according to gas industry association AGPU, up from 18.7 Bcm in 2023 and 18.5 Bcm in 2022.

Ukraine has managed to maintain operations at its critical gas infrastructure despite the ongoing war and barrage of missile and drone attacks.

A recent large-scale attack came on Jan. 15, with Naftogaz saying Russia had struck "another insidious blow" to Ukraine's gas infrastructure.

Nonetheless, Naftogaz said that all its business units were operating normally. "Gas supply to people is uninterrupted," it said.

Russia's defense ministry claimed Jan. 16 that it had damaged overground facilities at a large Ukrainian gas storage facility in the Lviv region.

Ukraine's largest site -- the 17 Bcm capacity Bilche-Volytsko-Uherske facility -- is located in the Lviv oblast.