Ukraine natural gas stock shrinks 1.4x yoy

Naftogaz of Ukraine (NAFTO) has accumulated 9 bcm of natural gas in its underground storage facilities, the company’s CEO said on July 17. He also stated the company imported 1.5 bcm of gas from the Russian Federation in June 2013 and is planning to import about the same amount from Russia in July.

Alexander Paraschiy: Ukraine’s gas stock in storage facilities as of end-June 2012 were almost 40% (4.4 bcm) higher than they are now. That implies that catching up to last year’s gas balance will cost the Ukrainian government about USD 1.7 bln in international currency reserves. Given that Naftogaz said it will increase its Russian gas imports this summer (and that’s only one of three sources for Ukraine, which include imports from the EU and imports by Ostchem from Russia), we can expect further deterioration in Ukraine’s trade balance and increased pressure on the local currency already in the next few months.