According to sources and officials from companies speaking to Reuters, European gas traders have begun storing natural gas in Ukraine, capitalizing on declining prices and available capacity there despite the ongoing war risks.
Following the outbreak of the Russian-Ukrainian war in February of the previous year, the European Union endeavored to stock up on gas at high levels to offset the drop in Russian supplies, especially during winter months when demand peaks.
The bloc is projected to achieve its goal of filling storage facilities by 90% by November 1st.
Traders mentioned that in addition to storage within the European Union regions, there’s a logical commercial reason for storing in Ukraine, which is to capitalize on the current cheaper prices compared to future deliveries.
The price of gas for delivery in September stands at 30 euros ($32.96) per megawatt-hour, in contrast to 49 euros for Q1 2024 delivery, as per rates from the Dutch TTF futures gas trading platform.
Ukrainian company Naftogaz stated that foreign clients could utilize more than ten billion cubic meters of the country’s storage capacity, which amounts to around 30 billion cubic meters, the majority of which are located in the west, far from the frontlines.
State-owned Slovakian firm SPP, which supplies the majority of its market, and some of it with Russian gas, revealed that they are considering the use of storage sites in Ukraine, given that storage capacity in Slovakia is already 90% full.
However, European traders highlighted potential risks due to possible military strikes, as well as questions concerning the fate of the network if Russia ceases gas pumping, which it continues to send westward through Ukraine.
