Europe is considering the possibility of storing its gas in Ukraine. This decision may seem crazy, but let's look deeper.
The Ukrainian underground storage facility Bilche-Volytsko-Uherske is located 60 miles from the EU border and 2 km underground. It's far enough from the war zone and deep enough to warrant confidence in the security of the storage. The storage area in this vault alone is more than 30 million m³, and the combined area of underground gas storage is the largest on the continent. On the eve of the new heating season, Europe's storage facilities are almost 70% full, and the Ukrainian operator Ukrgaztrans is lending a helping hand.
"The Ukrainian market offers storage at a fixed cost rate, which makes gas storage in Ukraine a very attractive and competitive option," said Marco Saalfrank for Bloomberg. The head of sales operations at the Swiss Axpo. It is worth noting that Swiss Axpo is a long-standing client of Ukrainian gas storage facilities, and they appreciated all the advantages of cooperation with Ukraine even before the war.
Further. The gas infrastructure of Ukraine has long served for the transit of Russian gas to Europe, so it can easily be reconfigured for the logistics of an energy resource from the EU, excluding Russia.
"Ukrainian storage can help to balance supply and demand during the second half of summer 2023, given their excellent connection to EU gas markets," German RWE AG for Bloomberg. RWE AG also used the services of Ukrainian underground gas storage facilities.
Russia uses energy as a weapon. To eliminate such risks in the future, traders recommend paying attention to Ukraine, the European Commission is "exploring if and how guarantees issued by public institutions could perhaps support unlocking access to natural gas storages in Ukraine," and Ukraine itself and Ukrgaztrans are developing security guarantees for their potential customers to become "a power bank for Europe," according to Ukrgaztrans' representative in his email to Bloomberg.
