Western traders storing gas in Ukraine doubles despite Russian war
THE number of Western traders storing their gas in Ukraine has more than doubled since August despite Moscow continuing its attacks on the country.
Some 52 energy companies have sent their gas to western Ukraine to be stored, up from 21 in August. It comes after EU storage levels neared full capacity in autumn and signals that energy traders are banking on gas prices rising enough to compensate for the risk. The gas being sent to Ukraine is being stored by Naftogaz, a state-owned company. Oleksiy Chernyshov, the chief executive, said Western traders were making the decision to use its storage services “based purely on commercial risk, without war risk insurance from third parties”.
Insurers are refusing to provide cover for gas flows to Ukraine without a state-backed EU guarantee, which policymakers in Brussels have been working on. However, they have so far failed to deliver this guarantee. Mr Chernyshov said: “This demonstrates Naftogaz’s reliability and critical role in the European energy market.”
The energy companies, which are based in countries including Germany, Switzerland and France, at one point had more than 2.5bn cubic metres of gas stored in Ukraine, worth about $1.5bn (£1.2bn).
They have recently started drawing down the reserves and are able to sell the gas at a higher price as demand ramps up.
Ukraine has significant gas storage capacities in the west of the country near the Polish border, established during the Soviet period when Russia sought to ensure a constant flow of natural gas to Europe. The companies choosing to store their gas with Naftogaz ahead of winter were from 15 different countries, the state energy provider said.
While the western parts of Ukraine are far away from the front line of the war, they have faced several attacks from Russia.
Naftogaz says its gas storage is 9,800ft below ground, which it claims makes the facility safe from missile attacks.
Mr Chernyshov said: “When European traders utilise our services, they significantly support Ukraine’s energy sector, enabling us to contribute more to the Ukrainian state budget. We are continuing our efforts to engage even more gas in the upcoming year.”
Meanwhile, the European Union has drawn up a €20bn (£17bn) workaround fund for Ukraine, as Brussels tries to overcome Hungary’s opposition to further financial support for the country.
Officials were forced to prepare the “Plan B” proposal after Viktor Orbán, the Hungarian prime minister, rejected a €50bn aid package for Kyiv at a summit in Brussels earlier this month.