Ukraine's Naftogaz signs a contract with Orlen for 100 mcm gas

Ukraine's Naftogaz signed a contract on Thursday for another 100 million cubic meters (mcm), bringing its total purchase volume from Orlen to 300 mcm.

After Russian missiles damaged the production facilities to the east of Ukraine, Ukraine was forced to increase gas imports and withdraw more gas from storage this winter and in the spring.

Sources in the industry told us earlier this month Orlen plans to sell 10 LNG cargoes to Ukraine this coming year, as Kyiv tries to fill up gas storage sites before winter.

Naftogaz has confirmed that it will be importing gas from Poland via the United States.

Serhiy Makogon said that Ukraine would need to import up to 6,3 bcm for winter 2025/26 due to the fact that reserves had fallen to record lows as a result of war-related damages to certain facilities.

He said that Ukraine would require up to $3 billion in order to purchase such large volumes of gas.

Makogon pointed out that Naftogaz announced the volume of imports required at a lower rate of 4.6 billion cubic meters.

According to the data from Ukraine's gas distribution operator, the country will import approximately 9.6 mcm gas on Thursday as opposed to 10.4 mcm gas on Wednesday. The data indicated that the majority of the volume would come from Hungary.

Naftogaz announced this week that it is in discussions with the government and other international financial institutions about raising 1 billion Euros to buy over 2 bcm gas for the heating season 2025/26.

The company said it would use 430 million Euros from the EBRD, Norway and other sources to buy an additional 1 bcm gas.

According to Ukrainian energy officials, the country needs around 13 bcm in gas storages for heating season 2025/26.

The Ukrainian underground storage facilities can store up to 30 billion cubic meters of gas. They are the largest and third-largest in Europe. Reporting by Anna Pruchnicka, Pavel Polityuk and Max Hunder; Writing by Max Hunder and Pavel Polityuk. Editing by David Goodman & David Evans.

(source: Reuters)