European gas traders have begun storing natural gas in Ukraine to take advantage of lower prices and available capacity there, regardless of the risks from the ongoing war, three traders and company officials said, SIA refers to Reuters.
Following Russia's invasion of Ukraine, begun in February last year, the European Union (EU) has sought high levels of gas storage to compensate for reduced Russian supply, especially during the peak demand winter months.
The bloc is expected to reach a target of filling its storage facilities to 90% full by Nov. 1.
Traders said there was commercial logic in storage in Ukraine, in addition to on EU soil, to take advantage of cheaper prices now versus for future delivery.
Gas for September delivery is priced at 30 euros per MWh compared with forward prices for first quarter of 2004 at 49 euros, according to prices from the TTF Dutch gas futures market.
Czech EPH group told Reuters its decision to use Ukrainian storage was also a sign of confidence in the country.
"EP Commodities transports natural gas to Ukraine and uses Ukrainian gas storage facilities," Miroslav Hasko, chairman at EPH's EP Commodities, said.
"We believe in the reliability of the Ukraine's gas transport and storage systems, which proved themselves even in such an immensely difficult wartime situation."
He did not disclose volumes.
EU countries' gas storage facilities were 87% full on Aug. 7, according to transparency platform GIE.
"We see a positive trend in gas injection by foreign traders into our (storage) facilities," said Ukriane's state-owned Ukrtransgas, part of Naftogaz Group.
Naftotgaz said foreign customers could use more than 10 billion cubic metres (bcm) of storage of the country's around 30 bcm capacity, mostly in the country's west, which is far from the front lines.
"We consider gas storage in Ukraine as one of the interesting business opportunities that we are currently considering," SPP told Reuters.
Other European traders said there are risks due to possible military strikes or questions over what happens to the network if Russia stops pumping the gas it still sends westward via Ukraine.
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