Starting from Monday, the weather has entered the usual parameters for this season, after an unusual ten-day cold. This means that gas and electricity consumption is decreasing, while generation at solar power plants rapidly goes up. So, it is time to fill underground gas storage facilities (UGS).
In 180 days – by mid-October – the emptied UGSs must be full. The planned volume of active gas should make up to 9 BCM by the start of the heating season (currently – less than 1 BCM). Of these, Ukraine will have to import about 4.5 BCM, due to record low reserves in storage facilities and the destruction of a significant part of gas production capacities (up to 40%) by Russian aggressors. According to NJSC Naftogaz of Ukraine, about half of the capacities has already been restored.
In order to timely fill the underground storage facilities, it is necessary to start importing gas at a rate of 25 million cubic meters per day throughout the entire injection season right now. This will require about 2.0 billion euros. NJSC Naftogaz of Ukraine will not be able to raise such an amount on its own. The EBRD and Norwegian funds have already provided about 400 million euros, but this is clearly not enough.
It is obvious now that the chosen gas market model is no longer effective. According to it, the state monopoly performs special obligations for the population, sells domestic gas to commercial entities at a price significantly lower than imports, and then has to import gas for the population, sustaining losses.
In my opinion, the only way out of this dire situation is to engage European and domestic traders and large industrial consumers of gas for imports. To do this, the gas market should be liberalized. After the cessation of Russian gas supplies in 2015, the same problem of deficit arose, but it was solved through market liberalization. I see no other way now, since financing gas imports from the State Budget in the conditions of acute shortage of funds for the defence industry during a large-scale war will lead us to a defeat.
In order to fulfil the functions of a supplier with special obligations and to maintain current prices for households and district heating companies, it is advisable for NJSC Naftogaz of Ukraine to pool all its production capacities solely on these categories of consumers, and to cover the deficient volume by purchasing gas from private companies at competitive prices.
Time is pressing. We cannot wait for better prices in Europe. After all, it is not only about money, but also about the limited capacity of European interconnectors that connect the gas transportation systems of Ukraine and the EU, as well as the domestic needs of Central European countries
