Ukraine gas storage is formidable asset for EU, says European Commission V-P
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European Commission vice-president Maros Sefcovic said the EU is looking into how best to provide insurance for firms that wish to store gas within Ukraine’s sites.
PHOTO: EPA-EFE
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KYIV - Ukraine’s vast underground gas storage sites will be vital in helping the European Union withstand a future energy crisis, but the bloc must find ways to incentivise companies to use them.
The EU is looking into how best to provide insurance for companies that wish to store gas within Ukraine’s sites, European Commission vice-president Maros Sefcovic told reporters on Thursday.
The country is capable of storing around 33 billion cubic m, equating to a fifth of annual pre-war Russian supply to the bloc.
“We need to take every possible precaution to make sure that we are as well prepared as we could be for the next winter,” said Mr Sefcovic.
“It’s a formidable asset, which could add an additional sense of security and would really add to the performance of the energy union.”
With Europe’s gas inventories already 80 per cent full – way above historic averages – the region is considering whether it is worth the risk to lean on vast, underused storage sites in Ukraine to stockpile more of the fuel.
Winter contracts trading at a premium to near-term prices are also increasing the attractiveness of storing as much gas as possible.
Ukraine is well connected to EU nations like Slovakia, Poland and Hungary via pipeline.
Mr Sefcovic did not give a timeline on when such “special risk insurance” might be available to companies that wish to use the facilities. He did not provide details of how it might work, or who would underwrite possible guarantees.
Ukraine is well connected to EU nations like Slovakia, Poland and Hungary via pipeline.
PHOTO: REUTERS
Ukraine has offered European traders the use of more than 10 billion cubic m of its underground storage facilities – roughly a third of the country’s capacity left from the Soviet era.
Yet suppliers are looking for a backstop against potential losses related to the conflict in the country.
Mr Sefcovic announced that the EU’s second tender of joint gas purchases successfully matched buyers and sellers for 12 billion cubic m of supplies, an increase from the 10.9 billion cubic m in the first round.
The EU had set a goal of aggregating enough demand to fill 15 per cent of its gas storage sites across the bloc, equivalent to around 13.5 billion cubic m. BLOOMBERG
