EUROPE'S GAS TO UKRAINE UP

PLATTS - 13 Jul 2020 - Ukraine's imports of gas from the EU increased to 70 million cu m/d on July 10, the largest daily volume in six years, due to strong supplies from European traders, the head of Ukraine's gas grid operator said July 11.

The increase comes after moves by Ukraine and its European neighbors to expand the capacity of virtual supplies, also known as back-hauling, by creating virtual entry points.

"Such a significant increase in import opportunities was made possible due to the creation of virtual points on the borders with Poland and Hungary, as well as the launch of virtual reverse flow," GTSOU chief Serhiy Makohon said in a statement posted on his Facebook account.

Ukraine's total gas import capacity has expanded to 170 million cu m/d in 2020, up from the maximum capacity of 66 million cu m/d in 2019, he said.

"Most of the imports go to seasonal underground gas storage facilities," Makohon said. "Two years ago, [state-owned] Naftogaz was the main gas supplier to [the facilities], but this year European traders imported a significant volume of gas. This is a significant additional income for the state budget."

Stock build

Ukraine it likely to build up to 26.5 Bcm of gas stocks before the start of high-demand season in October, according to UkrTransGaz, the state-owned company that operates gas storage facilities.

Ukraine has been seeking to expand its gas storage business by marketing its services to European traders seeking to capitalize on Ukraine's underused underground gas storage facilities, the largest in Europe.

The foreign traders kept 3.7 Bcm of gas in the customs warehouse mode as of July 1, which is just over three and a half times more than a year earlier, according to Ukrtransgaz. Under the customs warehouse regime, imported volumes can be stored for up to three years net of taxes and customs duties.

"The introduction of pan-European rules for working at the border is an important element of Ukraine's integration into the pan-European gas market," Makohon said. "And unrestricted imports are a guarantee of fair prices for Ukrainian consumers."

Ukraine's storage facilities are capable of holding about 31 Bcm of gas. They are now filled at 66.8% of its total capacity, according to UkrTransGaz.

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