European Union member states are exploring opportunities for using the Bilche-Volitsko-Uherske underground gas storage facility in Ukraine for their needs this winter, weighing all the risks associated with the Russian war.
Located 100 km from the border, the facility can store four times more gas than the largest such storage in Germany. The Ukrainian site is connected to EU networks thanks to the fact that Ukraine has transported Russian energy for decades.
European officials are now assessing the risks of using this and other facilities scattered across Ukraine that can store gas when demand and prices for gas rise sharply next winter. Today, storage facilities in the EU are more than 70% full.
Ukrainian storage facilities can help balance supply and demand in the second half of the summer 2023, given their excellent connection to EU gas markets, believes Germany’s RWE AG, which has already used Ukrainian gas storage facilities.
Gas storage in Ukraine must be justified by appropriate prices. The EU is also likely to have to intervene to protect Ukraine from potential war-related losses.
The country's gas storages, located in relative safety 2 km underground, have a capacity of more than 30 billion cubic meters. Their operator, Ukrtransgaz, offers a third of these capacities, which covers approximately 10% of the EU demand as of Q4 2022.
Negotiations on the deal are ongoing.
For its part, Ukrtransgaz is working on implementing service guarantees to reduce war-related risks as it seeks to become Europe’s "energy bank," according to the company's comments to Bloomberg, Ukrinform reports.
