Ukraine puts more than 3 bcm gas in storage-PM

14:14, 19 June 2009
Ukraine
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To ensure supplies ahead of next winter

Ukraine has placed 3.1 billion cubic metres of gas into underground storage over two months at the start of a programme to ensure supplies ahead of next winter, Prime Minister Yulia Tymoshenko said on Friday, Reuters reported.

Tymoshenko disclosed the figure to local officials a day after state energy firm Naftogaz suggested that European gas companies should consider buying gas from Russia and storing it in Ukraine to avoid any recurrence of supply disruptions.

The European Union`s Executive Commission on Thursday called on Naftogaz, which faces severe financial difficulties, to seal an agreement with Russia to ensure uninterrupted gas flows.

Ukraine has long tried to store supplies of gas in preparation for winter, but Naftogaz`s financial position had ruled out purchases in the first quarter of 2009.

Volumes of imports from Russian giant Gazprom (GAZP.MM) have been well below levels set down in a New Year 10-year supply agreement Tymoshenko signed to end a three-week supply cutoff that affected hundreds of thousands of European customers.

Tymoshenko told the meeting of officials that Ukraine intended to boost imports in July, when the price of Russian gas is due to fall.

"This month, we are to pay $250 million and next month we will have to pay $1 billion," she said.

Naftogaz says it expects gas prices to decline to $219 per 1,000 cubic metres from $270 in the second quarter and $360 in the first quarter. Ukraine hopes the price will fall further to $162 in the final quarter of 2009.

Tymoshenko this week said she hoped to raise credits of about $4 billion to make necessary gas purchases.

Ukraine last year imported 49 bcm of gas valued at $8.6 billion. Plans this year call for the purchase of about 33 bcm.

Government plans for this specify 24.811 bcm to be stored underground in 2009, including 2.5 bcm in the first quarter, 5.079 bcm in the second, 8.455 bcn in the third and 8.777 bcm in the final quarter.

At the end of last year, a record 30 bcm was placed in underground storage, enabling Kiev to withstand the cutoff endured during the January dispute.

Reuters

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