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European traders store gas in Ukraine in spite of risk posed by the war

9 August 2023

European gas traders have started storing natural gas in Ukraine, taking advantage of low prices and available capacity there, regardless of the risks stemming from the war, several traders and company officials told Reuters.

Following Russia’s invasion of Ukraine, which began in February 2022, the European Union has sought to secure gas storage capacity to cope with reduced Russian gas supplies, particularly during the winter months when demand peaks, according to Agerpres.

The community block would reach, by November 1, the target of filling the gas deposits up to 90% of the capacity.

Traders interviewed by Reuters say there is commercial logic in storing gas in Ukraine, in addition to storage in the EU, to take advantage of lower prices today versus future supplies. Currently gas quotes for delivery in September are around €30 per Megawatt hour, compared to forward prices of €49 per Megawatt hour in the first quarter of 2024.

The Czech group EPH emphasizes that the decision to use gas deposits in Ukraine is also a sign of confidence in Ukraine. “EP Commodities transports natural gas to Ukraine and uses Ukraine’s gas storage facilities. We believe that Ukraine’s gas transportation and storage system has proven its reliability even in an extremely difficult situation such as war,” he said. Miroslav Hasko, president of the EP Commodities division within the EPH group. However, Hasko did not disclose the quantities of gas involved.

According to the GIE platform, gas storages in the EU countries were at a filling level of 87% on August 7, 2023.

“We see a positive trend regarding the injection of gas by foreign traders into our storage facilities,” announced the Ukrainian state company Ukrtransgas, part of the Naftogaz energy group. According to this group, foreign customers could use storage capacities of more than 10 billion cubic meters in Ukraine, out of the country’s total capacity of about 30 billion cubic meters, mainly in the west of the country, which is far from the front line.

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