FT: European gas traders stop using Ukrainian storage facilities after Russian attacks

This summer, European traders are using only part of Ukraineʼs natural gas storage because of Russian attacks.

The Financial Times (FT) writes about it.

Ukraine has the largest underground storage facilities in Europe and last year provided valuable space for EU companies to store excess gas ahead of winter.

But after Russian attacks in the spring on energy infrastructure, including pumping facilities for gas storage, European volumes in June and July fell to a tenth of the volumes stored in the same period last year.

Gas storage in the EU can hold a maximum of about 100 billion cubic meters of natural gas, while the blocʼs annual demand is between 350 and 500 billion cubic meters, depending on weather and other conditions.

Last year, Ukraine offered almost 10 billion cubic meters of additional gas storage capacity, and European companies stockpiled more than 2 billion cubic meters of gas ahead of the winter months.

However, there has been little pumping this year, although EU storage is 86% full, the highest level this year.

According to the Argus agency, European companies shipped only 15.4 million and 51.9 million cubic meters in June and July, compared to 102.7 million and 586.6 million cubic meters in those months of 2023.

The actual gas reservoirs are located deep underground, which protects them from shocks, but damage to the above-ground facilities used to pump gas outside the storage facilities is a significant risk that worries traders, the Financial Times writes.

"The main problem is not the loss of gas, but the inability to withdraw it when it is needed," said the head of continental Europe trading at energy group Axpo Marco Saalfrank.

• In 2022, the EU experienced an energy crisis, with natural gas prices at record highs as Russia cut supplies. European countries previously depended on direct supplies of gas from the Russian Federation and did not have sufficient capacity to store it.
• Storage facilities in the EU reached almost maximum capacity already in mid-October 2022, and Ukraine became an alternative for storing gas intended for neighboring states. Already in August 2023, European traders began to store natural gas in Ukrainian storage facilities, despite the risks associated with the war.
• In January of this year, the Financial Times wrote that Ukrainian gas storages helped the EU prevent an energy crisis.