The European gas market lacks storage facilities
The beginning of this year brought many shocks to the world economy, one of which was the fall in demand for energy. Against the backdrop of the oil war, the situation with gas was not so critical, but this segment was also experiencing its own difficulties. A warm winter aggravated the situation, and the European gas market faced the problem of oversupply of raw materials that needed to be stored somewhere. The solution was the depleted deposits, which are in Ukraine.
Tanks in northwest Europe were already filled by 77% by June, although in other years the fuel reserves did not exceed 55% by that time. At the same time, the volumes of gas in the storage facilities continued to grow for some period of time, which was facilitated by the decrease in the cost of raw materials. Therefore, local buyers had to urgently look for an alternative for the overfilled storage facilities.
Thus, many European traders have paid attention to the option of storing gas in Ukraine. Demand for local facilities in June increased almost 3 times, if compared to last year. The number of companies from Europe, which decided to use exhausted Ukrainian gas fields for their raw materials, increased by 8 times. Back in 2019 there were only seven such companies, and in June this year there were already 54 of them. For its part, Ukrtransgas Corporation has done its best to attract as many European partners as possible. The company said that storage conditions in Ukrainian capacities are the most advantageous in Europe – here the low prices for the containers themselves and for fuel transportation.
Currently, there are approximately 13 million cubic meters of storage space available in Ukraine, which is equivalent to 13% of all facilities in Europe. Analysts believe that if all capacities are filled, it will be possible to maintain the gas price at the current level, and the risk of its reduction will be unlikely. At the same time, if European traders refused to use Ukrainian storage facilities, all the existing facilities in the EU would be filled by the end of summer. With such a development one could expect the price for raw materials to fall to negative values.
It should be noted that such demand for local storage facilities is extremely beneficial for Ukraine itself. Against the background of the fact that the EU reduced the volumes of supplies from Gazprom, the country lost money on transportation. Therefore, now Ukrtransgas is interested in storing fuel at its facilities as many traders as possible, as this will allow it to get more money.