Ukraine's underground storage facilities helped Europe keep gas prices low

Ukrainian underground storages helped Europe curb the rise in gas prices in December, writes the Financial Times.

"Ukraine is playing a key role for central and eastern Europe’s security of gas supply this winter," said Natasha Fielding, head of European gas pricing at Argus Media agency.

European traders are withdrawing gas from storage facilities in Ukraine, which helps Europe maintain its own reserves at a high level. As of the end of December, this indicator was at an unprecedented level for this time of year — just below 90%.

Large reserves made it possible to maintain low prices at the European level. The reference benchmark TTF was trading about three times cheaper in December than last year.

The European Commission expects that gas reserves in European storage will not fall below 45% during January, but has advised member states to aim for 55%.

Analysts at Rystad Energy, meanwhile, predict that, assuming there are no major disruptions in supply and demand remains at its current low level, 80 billion cubic meters of gas, or about 70% of capacity, will remain in EU storage at the end of March.

Keeping stocks at a high level will facilitate their replenishment before the next cold season.

Ukraine has 13 underground gas storage facilities, capable of storing approximately as much as the entire country consumes during the year – 32 billion cubic meters of gas. The design capacity of Ukrainian facilities corresponds to the storage volumes of Hungary, Austria, France and Italy combined. In terms of size, the Ukrainian underground storage capacity is the largest in Europe and the third in the world after the USA and Russia.

In April 2023, during negotiations in Brussels, Ukraine offered the European Union a third of its own gas storage facilities.

Ukraine's storage system operator Ukrtransgaz has passed certification as a gas storage operator according to European rules.