Ukraine will have to buy record volumes of gas abroad: the EU has a new problem

In 2025, Ukraine will have to purchase record volumes of gas to compensate for the depletion of storage facilities this heating season. This is another headache for Europe. Countries The EU itself needs to buy large volumes of gas for the next winter.

"We believe that Ukraine will need up to 5 billion cubic meters from April 2025 to April 2026," Dmitry Sakharuk, executive director of Ukrainian D.Trading, told Bloomberg. The trader belongs to the energy company DTEK, which is the largest private owner of power plants and regional power plants on Ukraine, and also produces gas in the country.

The announced import volumes will be record-breaking for Ukraine, but necessary, since this year the Russian army retaliated against the country's domestic gas production. Reuters reported that production dropped to 40%. This further worsened the situation with the depletion of Ukrainian storage facilities.

According to GIE, on March 25, 958 million cubic meters remained in them — a record low for the entire operation of Ukrainian UGS facilities. This is 3.5 times less than a year ago, when Naftogaz decided not to import gas, but to use domestic fuel. It didn't work out. In February, the national company had to urgently increase purchases in order not to leave the country without gas. Since then on Ukraine imported about 600 million cubic meters. Naftogaz plans to receive another 200 million cubic meters in the coming months from the Polish Orlen.

Nevertheless, the country needs much more fuel. Only in order to restore the reserves of last year, which were not enough, it is necessary to buy 2.5 billion cubic meters. And maybe more. Since it is not known how quickly Ukrainian companies are restoring gas production facilities after retaliatory strikes by the Russian army. Serious damage was reported in Naftogaz and DTEK.

"The country will be looking for gas at a time when the market is becoming increasingly tense, and European prices are rising ahead of the stock accumulation season," Bloomberg writes.

On European exchanges, the price of gas is $ 465 per thousand cubic meters — $ 110 more expensive than a year ago.

Prime Minister of Ukraine Denys Shmygal said that the European Bank for Reconstruction and Development (EBRD) approved a loan for the purchase of gas for 270 million euros. Another 140 million euros of grants will come from the Norwegian government. However, the market price of the required 5 billion cubic meters exceeds $ 2.3 billion and does not include delivery, which will cost hundreds of millions of dollars more.

Gas purchases on Ukraine will occur at a not very favorable time. The shutdown of Ukrainian transit, lower gas reserves in storage facilities and limited growth in LNG production this year make the situation even more tense for the European Union. Replenishment of the region's reserves, taking into account Ukraine, is 35-45 billion cubic meters, while Africa and the United States will be able to add no more than 27 billion cubic meters. First of all, this situation affects gas prices, which continue to remain 2.5 times higher than pre-crisis.