Ukraine must start urgent gas imports, says ex-head of transit operator

KYIV (Reuters) -The volume of gas in Ukraine’s storage facilities has fallen to near the critical 10% mark and the country urgently needs to start importing significant amounts to meet its needs, the former head of the transit operator Serhiy Makogon said on Facebook.

Daily gas production cannot cover all of Ukraine’s requirements in the cold season and the country pumps gas into storage during the summer months for use in winter.

“Our storage facilities are gradually but surely approaching the level of 10% fullness,” said Makogon, who led the Ukrainian state transit operator for more than three years before stepping down in 2022.

He added that this would reduce possible withdrawals to 60 million cubic meters (mcm) per day.

Ukraine has stopped reporting the volume of gas in storage facilities, which have been the target of regular Russian missile attacks since Russia’s full-scale invasion in February, 2022.

However, the state-owned Naftogaz oil and gas firm, parent company of the firm that operates gas storages, said Naftogaz Group has sufficient gas reserves for a stable heating season.

Makogon noted that as gas in storage is pressurised, lower levels mean less can be extracted on a daily basis.

“This will mean that we will not be able to meet gas demand through production and underground gas facilities, and we will need to import gas on an emergency basis,” he said.

Storage facilities were approximately 20% full a year ago and 22-23% full at the same point in 2023, he said.

Makogon said current daily gas consumption is about 110 mcm, covered by 52 mcm of production and 58 mcm from storage.

He noted that with frosts, consumption could rise as far as 150 mcm, a jump that could not be covered from reserves, meaning imports would be required “in significant volumes and at any price”.

Roman Chumak, CEO of Naftogaz Group, said in a statement: “We are monitoring the situation with gas reserves. They will be enough for the heating season to go smoothly.”

“Naftogaz Group also imports fuel, so we must be prepared for all challenges in the war,” he said, giving no additional details.

Data from the gas transmission operator shows Ukraine is importing small amounts of gas from Hungary.

Russian gas flows to Europe via Ukraine ended at the start of the year after Kyiv refused to extend a transit agreement with Moscow to reduce revenue streams supporting its war effort.

Industry sources have previously said that Ukraine needs to import about 100 mcm of gas per month during winter to maintain its system after the shutdown of the Russian transit.

(Reporting by Pavel PolityukEditing by Kirsten Donovan and Frances Kerry)

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