Ukraine is offering European Union (EU) traders the opportunity to rent up to half of its vast natural gas storage capacity for the upcoming winter season, according to Prime Minister Denis Shmigal. With a total gas storage volume of 31 billion cubic meters, Ukraine boasts the largest storage capacity in Europe, surpassing its domestic needs. Shmigal stated that Ukraine could make up to 15 billion cubic meters of storage available to European traders.
This move comes as Ukraine aims to position itself as an energy backup for the EU. In April, Aleksey Chernyshov, CEO of Ukrainian state energy company Naftogaz, expressed Ukraine’s willingness to offer its large storage capacities to serve as an energy safety net for the bloc. He stated that European countries could store their gas in Ukraine and retrieve it when needed.
Since then, foreign traders have already begun taking advantage of Ukraine’s storage facilities. In early October, Chernyshov announced that volumes of natural gas stored in Ukraine by foreign traders had increased from 1.8 billion cubic meters in mid-September to 2.2 billion cubic meters. He noted that they had received 14 applications from non-residents to pump gas into Ukrainian storage facilities in just one day.
European gas traders and energy groups have been drawn to Ukraine’s storage facilities this year due to lower costs and available capacity, despite the conflict-related risks associated with the region. Miroslav Hasko, chairman of the Czech energy group EP Commodities, confirmed that his company transports natural gas to Ukraine and utilizes Ukrainian gas storage facilities. He described gas storage in Ukraine as an attractive business opportunity that they are currently considering. Similarly, Slovakia’s state-owned SPP, a major supplier in the Slovak market, is exploring the possibility of utilizing Ukrainian storage.
Ukraine’s strategic location enables natural gas to be purchased and transported to the country through reverse flows in pipelines from neighboring countries such as Hungary, Slovakia, and Poland. This allows for greater flexibility and diversification for European traders looking to store their gas in Ukraine.
The offer from Ukraine to rent its natural gas storage capacity is not only advantageous for European traders but also strengthens the country’s position as an important energy player in the region. As the largest gas storage capacity in Europe, Ukraine has the potential to contribute to the continent’s energy security. By leveraging its resources and infrastructure, Ukraine can establish itself as a reliable partner for the EU and provide stability in times of supply disruptions or increased demand.
In conclusion, Ukraine’s offer to rent its natural gas storage facilities to EU traders demonstrates its commitment to becoming an energy backup for the bloc. With its significant storage capacity and strategic location, Ukraine presents an appealing opportunity for European traders to store their gas. This move not only benefits the traders but also strengthens Ukraine’s position in the European energy market and enhances regional energy security.