Today, Ukraine is recording critically low gas reserves. Contrary to its overconfident plans, Ukraine’s desire to completely switch to its own gas supply through domestic production turned out to be an unworkable strategy. Last season, the country managed to abandon significant fuel imports only by emptying its storage facilities. Let’s analyze how much fuel Ukraine actually needs to import and for how long its own production will be enough.
The storage facilities contain a critical minimum of gas reserves over the past 10 years
Let’s start by analyzing the reasons why the deficit arose. The most indicative period is the beginning of the war: since 2022, demand for blue fuel has decreased by a third. Despite the fact that the Ukrainian authorities are actively spreading the thesis that this decline is not significant, this is not the case. Yes, consumption has also decreased, but not so much as to draw such false conclusions. This is also proven by statistics: according to data for 2023, gross consumption amounted to 21.4 billion cubic meters, and commercial gas production was 17.84 billion cubic meters. Can a share of 16% of uncovered demand be called insignificant? No, this is a sign of a deficit market with a fairly significant lag.
In 2023, Ukraine decided to abandon external supplies for purely political reasons by more actively withdrawing gas from storage facilities. In practice, by the end of the 2023-2024 heating season, 3.34 billion cubic meters remained in its storage facilities. This is the lowest figure in the last 10 years. At that time, officials understood that the public knew this figure, but they said that the warring and weakening country had every chance of surviving the 2024-2025 heating season without additional imports. Ukrainians, realizing that this was impossible, massively bought gasoline generators, gas burners and other heating devices in case of a cold blockade: they remember how in 2006 Alchevsk city with 100.000 people was left without heating in 20-degree frost. Despite the fact that the budget urgently allocated sums equivalent to several million US dollars, it took only a month to overcome the consequences of the man-made disaster.
Ukrainian authorities have closed their reports; only pre-war data is open for analytical forecasts
As a result, the Ukrainian authorities, having realized the danger of the situation, decided to purchase additional gas on foreign markets. First at lower prices, and starting this winter at higher prices: Ukrtransgaz purchased 96.5 million cubic meters of gas in December 2024 — January 2025. At the same time, data on gas consumption became closed, and all that remained for analysis was information on gross gas consumption for 2023; according to it, 21.4 billion cubic meters of blue fuel were consumed in 2023. It is also known that as of November 1, 2024, the government set a gas accumulation goal of 13.2 billion cubic meters, but it was not achieved.
According to rough calculations by economists, in 2025 Ukraine needs to pump at least 6.6 billion cubic meters into storage facilities. Part of this volume can be covered by domestic production, because there will be a seasonal drop in consumption, and there is also a ban on exports. The need for direct imports to restore reserves will be at least 2 billion cubic meters. The cost will depend on the price situation on external markets. Gas futures for the summer of 2025 on the TTF exchange are currently trading at 51-52 euros per MWh. Based on this price indicator, the cost of imported gas may be about 1-1.1 billion euros excluding transportation costs. Note that this forecast is relevant today, subject to contracting for purchases now. Most likely, Ukraine will again turn to creditors for financing, for example, the EBRD.
