Ukraine faces imminent gas import needs as storage levels drop, expert warns

"There have probably never been such minimum gas reserves in our UGS facilities," he said.

“Our UGS facilities are gradually but surely approaching the 10% level of fullness, when the design gas withdrawal capacity will drop to 60 million cubic meters per day. This means we will not be able to meet the gas demand through domestic production and storage, and urgent gas imports will be necessary."

Currently, average daily gas consumption in Ukraine is 110 million cubic meters, according to Makogon.

"Production provides 52 million cubic meters per day, the rest (58 million cubic meters) should be provided by UGS facilities and/or imports," he said. 

"But if there are frosts, consumption may increase to 140-150 million cubic meters per day, and the storage facilities will no longer be able to supply 90-100 million cubic meters in design modes.

Amid low gas reserves, the Naftogaz group will begin importing gas starting in February. During the summer, the company could purchase import gas for $300-$350 per thousand cubic meters.

"Now, it will be buying at around $500-$550," Makogon added. 

"Naftogaz spent more than 13 billion hryvnias ($309.9 million) on purchasing gas from private producers, which did not increase the gas in storage but merely changed ownership. And this money could have been used to buy 800-900 million cubic meters of imported gas in the summer."

In August 2024, Naftogaz began injecting gas into storage facilities using a loan from the European Bank for Reconstruction and Development (EBRD), which will be stored under a customs warehouse regime.

At the end of 2022, Naftogaz secured a 300 million euro ($312.5 million) loan from the EBRD under state guarantees, creating a reserve of 748 million cubic meters of natural gas under the customs warehouse regime.

A new agreement for a 200 million euro ($208.4 million) EBRD loan to Naftogaz under state guarantees was signed in November 2023. The credit risk was shared between Norway and the Netherlands.

The customs warehouse regime allows natural gas to be stored in Ukraine's underground facilities for up to three years without paying taxes and customs duties during its subsequent transportation out of the country.