Overflowing gas storage facilities force Europe to store gas in Ukraine

On the eve of winter, EU countries have accumulated such gas reserves that they now have to store it in Ukraine, which has the largest storage facilities in Europe. In total, it has offered European companies 10 billion cubic meters of storage capacity.

According to Gas Infrastructure Europe, storage facilities in the EU are 99.24% full. In an effort to overcome the bloc's dependence on Russian gas, the European Commission set a target of 90% by November 1 this year, but it was reached in mid-August.

Over the previous five years, the storage facilities have never been filled to this level. Therefore, European energy companies are increasingly sending gas to Ukraine, the Financial Times writes. Ukraine has large underground storage facilities (about 30 billion cubic meters), and now, according to Naftogaz, they already contain more than 2 billion cubic meters of European gas. This has helped Ukraine's gas reserves reach their highest level since the beginning of the Russian invasion, with its storage facilities now 39.3% full, according to Gas Infrastructure Europe.

To attract partners, Ukraine has introduced low storage tariffs and zero customs duties for three years. Foreign companies have been offered storage facilities for more than 10 billion cubic meters. If they are filled, the EU will receive a reserve equal to about half of Gazprom's current supplies to Europe.

According to the VEB Bank's forecast, Gazprom's supplies to Europe in 2023 will amount to 21 billion cubic meters.

Before the war, in 2021, Gazprom's European supplies exceeded 150 billion cubic meters.

"Despite the full-scale war, commercial companies have placed more than €1 billion worth of gas in Ukrainian storage facilities," said Naftogaz CEO Oleksiy Chernyshov.

The storage facilities are located underground, mostly in the western part of the country. Despite the fact that 128 Naftogaz facilities were damaged by Russian strikes from January to October, the underground storage facilities were not affected, according to industry representatives.

Background. European natural gas prices reportedly declined for the second day in a row as November began with mild and windy weather and optimism that the war in the Middle East will not affect global fuel flows.