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Ukraine gas storage too risky due to war – GIE president


19 Sept 2023 13:44





19 Sept 2023 13:36

(Montel) The EU should not use Ukraine’s gas storage capacity due the high risks related to the ongoing war with Russia, notwithstanding European stocks hovering near full capacity, Gas Infrastructure Europe (GIE) president Torben Brabo said on Tuesday.

“We know they have huge storages, but we have assessed it with the [European] Commission and a lot of commercial sellers [and] the risk right now is too big,” he said during lobby Francegaz’s annual conference in Paris.

Ukraine has around 112 TWh of gas storage capacity, which is currently just over a third full, according to GIE data. With Europe’s facilities – excluding Ukraine – already at 94% of capacity, some market participants had been eyeing Ukraine’s capacity to store surplus supply.

“Who would buy gas in the Western European market and take it into Ukrainian storage?” Brabo said, noting the facilities had already been filled to higher-than-expected levels.

“You don't know if you can get it out,” he said, pointing to the risk of “a terror or war incident”.

He noted also that the “biggest insurance companies” would not insure the gas.

Little risk?
But a spokesperson for Gas Transmission System Operator of Ukraine (GTSOU) said he was “surprised” by Brabo’s comments.

“The authorities of Ukraine, GTSOU, and [storage operator] Ukrtransgaz have made significant efforts to ensure the safety of all gas reserves stored in Ukraine,” he said.

“European traders trust the reliability of our system and have pumped around 2bcm of gas into Ukrainian storage facilities since June 2023,” he added.

Yuriy Onyshkiv, a Kyiv-based gas market analyst at LSEG, said he did not see much risk in using Ukraine’s gas storage facilities.

He noted the TSO and storage operator had carried out independent stress tests to confirm the robustness of the system.

“[Even] when there were massive power outages last winter due to Russia targeting of the energy infrastructure, storage operations were uninterrupted,” he said.

He also noted most of the storage capacity – 17bcm out of 31bcm – was located in the western part of the country and deep underground.

“There is no risk of losing physical access to these sites,” he said.

Last week, Ukraine’s energy minister, German Galushchenko, said in a press statement that he expected European traders to increase gas held in storage to 3bcm by “the beginning of winter”.

He noted that Ukraine was ready to offer foreign companies up to 15bcm of its underground storage facilities.

Montel contacted storage operator Ukrtransgaz and state oil and gas firm Naftogaz for comment.

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