Ukraine bans export of gas, including volumes held in Ukrainian storage: UkrTransGaz

Ukraine's energy ministry has banned the export of gas held in Ukraine, including gas stored in the country under the "customs warehouse" initiative, state-owned storage operator UkrTransGaz said March 3.

Ukraine exports small amounts of gas to its western neighbors, usually gas held in storage by European traders that can move gas back into Europe.

The ban is not related to the ongoing transit of Russian gas via Ukraine to Europe.

"The ministry has banned market participants from exporting natural gas from the customs territory of our country," UkrTransGaz said in a statement.

"This also applies to gas stored in Ukraine's underground gas storage facilities in the 'customs warehouse' mode," it said.

The customs warehouse mechanism allows traders to store gas in Ukraine for up to three years net of taxes and customs duties.

"The restriction was introduced on March 3 in connection with the conduct of hostilities on the territory of Ukraine," it said.

'Unprecedented' actions

State gas grid operator GTSOU said in a statement later March 3 that it had suspended transportation services for gas export operations, but stressed that the ban did not affect the transit of Russian gas via Ukraine.

"From March 4, the distribution of capacity and confirmation of nominations for the purpose of gas exports is stopped," it said.

"Russia's aggression against Ukraine has led to extraordinary and unprecedented conditions and restrictions, when all energy companies must focus on security of gas supply for Ukraine and Ukrainians," it said.

"This decision does not affect the transit of gas through the territory of Ukraine."

Ukraine's gas production has fallen since Russia began its invasion of Ukraine on Feb. 24.

Output averaged 47 million cu m/d for the Feb. 24-28 gas days, after consistently running around the 53 million cu m/d mark so far in 2022, data from S&P Global Commodity Insights showed.

The new export ban is likely a response to the lower output and a bid to make sure Ukraine keeps as much gas as it can within its own borders during the conflict with Russia.

Exports together with re-exports of gas from Ukraine to European countries amounted to 178 million cu m in January, GTSOU said last month.

Exports to Hungary amounted to 155 million cu m, to Slovakia 14.1 million cu m, to Poland 0.7 million cu m, and to Romania 8.3 million cu m.