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Ukraine Has One of the Largest Gas Storage Capacities, A Key Resource for Europe

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Ukraine Has One of the Largest Gas Storage Capacities, A Key Resource for Europe

Ukrainian officials propose buying LNG (Liquefied natural gas) from the US and storing it in Ukrainian underground reserves. The capacity is there.

Ukraine's network of underground natural gas storage facilities is one of the largest in the world. Ukraine ranks third globally in terms of capacity, following the United States and Russia, and holds the leading position in Europe. Leveraging these storage facilities could reshape the energy market and strengthen Europe’s energy security.

And Ukraine is offering these capabilities to its European partners. 

"We see a huge potential, especially after the termination of the transit of Russian gas through the territory of Ukraine, in the possibility of purchasing LNG gas from the United States of America," Ukraine’s Foreign Minister Andrii Sybiha said at a joint press conference with his UK counterpart David Lammy, as quoted by Reuters. 

What does this mean in practice?

The growing role of American LNG in the European market

As of January 1, Ukraine did not renew the agreement for the transit of Russian gas to Europe, creating demand for an additional 15 billion cubic meters of gas annually. This demand can currently be relatively easily replaced by LNG, especially amid increasing US production, as the country is one of the world's leading LNG exporters.

Ahead of the end of Russian gas transit, reports indicated that the first shipments of liquefied gas from the US had begun arriving. One such shipment, carrying around 100 million cubic meters, was delivered to Europe by Ukraine’s largest energy supplier, DTEK.

"Cargoes like this are not only providing the region with a flexible and secure source of power but are further eroding Russia’s influence over our energy system," said DTEK CEO Maksym Tymchenko.

On December 27, 2024, the vessel docked in Greece. Through the "Vertical Corridor" initiative, the company planned to transport the gas through Greece, Bulgaria, Romania, Hungary, Slovakia, Moldova, and Ukraine.

Source: GTS Operator of Ukraine.
Source: GTS Operator of Ukraine.

Ukraine does not even need to build its own LNG terminal to import American LNG. The country can already transport gas to its storage facilities via Polish terminals, which then inject it into underground storage. 

Ukraine can currently receive and transport up to 7.5 billion cubic meters of gas through Polish terminals for storage in underground facilities and, if necessary, further transportation to the EU via its own gas transmission system, according to various estimates. This capacity can be significantly increased in the future.

Ukraine’s underground gas storage facilities

Ukraine has an extensive network of underground natural gas storage facilities.  The country currently operates 12 facilities capable of storing natural gas.

The majority of these facilities—80% of all available storage capacity—are located in western Ukraine, geographically close to European countries. This proximity reduces transit costs and enhances security.

Ukraine’s underground gas storage facilities lie at depths of 400 meters to 2 kilometers, making them fully protected from potential Russian missile strikes, Oleksiy Chernyshov, head of Naftogaz of Ukraine, the country’s largest national oil and gas company, previously stated. Their proximity to the European border adds an extra layer of security.

What are the storage capacities? Estimates suggest that Ukraine’s underground storage facilities have a total capacity of between 31 billion and 37 billion cubic meters. A significant portion of these storage capacities is available to European companies. If necessary, gas can be purchased and injected into storage during the summer, when prices are lower, and used in winter.

European companies have previously used Ukrainian storage facilities for gas storage. The next step is to expand cooperation with the US.

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