Ukrainian gas storage facilities help the European Union prevent an energy crisis. European companies accelerated the withdrawal of natural gas from Ukraineʼs storage facilities due to the growing need for heating in winter.
This is reported by the Financial Times.
Last year, European companies turned to Ukraine to store their reserves.
According to analysts, the decision helped energy associations and traders withdraw only relatively small volumes from storage in the European Union. This contributed to maintaining low gas prices and easier replenishment of reserves.
Ukraine has more gas storage capacity than any other EU country, thanks to its key role in the transit of Russian pipeline gas, which before the invasion accounted for almost 40% of the EUʼs gas supply.
According to Naftogaz, European companies have accumulated about 2.5 billion cubic meters of natural gas before winter, which is a record since the Russian invasion of Ukraine.
Argus Media reported that companies began taking gas from Ukrainian storage facilities in early November. Net withdrawal averaged about 10.7 million cubic meters per day. The pace accelerated to 26 million cubic meters daily amid a sharp cold snap in December.
Poland received more than half of the gas extracted from Ukrainian storages, and the rest was used by Moldova, Slovakia and Hungary.
According to the information of the industry organization Gas Infrastructure Europe, the level of gas storage in the EU, despite the cold season, remained at the level of almost 90% even at the end of December, which is significantly higher than the average of the previous five years.
Large reserves have helped keep gas prices low in Europe. The Title Transfer Facility, a virtual trading point for natural gas in the Netherlands, set a price nearly three times lower than it was a year ago in December.
Rystad Energy forecasts that if there are no major supply disruptions and if demand remains at current low levels, 80 billion cubic meters of gas, or 70% of capacity, will remain in EU storage at the end of March.
- In 2022, the bloc experienced an energy crisis, with natural gas prices hitting record highs as Russia cut supplies. European countries previously depended on direct gas supplies from the Russian Federation and did not have sufficient gas storage capacity.
- Storage facilities in the EU reached almost maximum capacity already in mid-October, and Ukraine became an alternative for storing gas intended for neighboring states. Ukraine has also offered incentives such as cheap storage tariffs and a three-year duty exemption that will allow gas to be easily reimported into the EU.
- Most of the tanks are located deep underground in the west, far from the front line. Ukraine offered foreign customers up to ten billion cubic meters, a third of Ukrainian capacity, in addition to 115 billion cubic meters of storage in the EU.