Ukraine reassures gas traders of storage facilities' safety after missile strike
Ukraine reassures gas traders of storage facilities' safety after missile strike (Getty Images)
Ukraine is striving to convince European natural gas traders that storing fuel in the country's vast underground reservoirs remains safe following the Russian missile strike, according to Bloomberg.
Kyiv anticipates loading up to 4 billion cubic meters of gas into its underground gas storage facilities during the summer months, which is more than last year, according to Roman Maliutin, the CEO of the gas storage operator Ukrtransgaz.
European countries typically use this season to stockpile reserves ahead of the next heating period, although they may exercise caution following the strike on a facility in western Ukraine on March 24, as noted by Bloomberg.
"I would like to stress that damages do not affect our capabilities for gas injection into underground gas storage," Maliutin responded to Bloomberg News inquiries.
Ukrainian gas storage
Traders have been cautious about storing gas in Ukraine since Moscow unleashed the war in February 2022. Nevertheless, the operator currently has over a thousand contracts, 168 of which are with non-resident companies, Maliutin said.
"Sunday’s attack will enhance this caution. However, we have enough capacity reserve and are ready to react," he added.
Ukrtransgaz offers foreign traders a volume of up to 10 billion cubic meters of gas, or one-third of all gas storage capacity in Ukraine. Traders are increasingly considering Ukraine as a place to deposit surplus gas when European storage facilities fill up, and last year they injected 2.5 billion cubic meters there.
Maliutin said that the difference between summer and winter gas prices in Europe would help determine how much gas flows to Ukrainian facilities.
Storage repair
Ukrtransgaz has measures in place to mitigate the consequences in case of damage to a specific facility, he added. For instance, it doesn't tie gas in certain storages to specific consumers but views all its facilities as one.
Following the March 24 strike, Ukrtransgaz reduced its daily capacity by 6% as an undisclosed facility is undergoing repairs. The company offers a capacity of 73 million cubic meters per day, while actual orders do not exceed 30 million cubic meters, Maliutin said.
The company has time to repair the damaged facility, as the damaged equipment is only needed to meet peak gas demand starting from January next year. Maliutin said that the task is to complete the repair as quickly as possible.
Recall that Oleksii Chernyshov, the head of Naftogaz Ukraine, said that Naftogaz facilities in western Ukraine were damaged during the missile strike on the morning of March 24.
