June 2025, Vol. 252, No. 6
Features
Ukraine Seeks U.S. LNG Via European Routes to Rebuild Gas Reserves Before Winter
By Andreas Walstad, European Correspondent
(P&GJ) – Polish energy company ORLEN and Ukraine’s Naftogaz announced on March 18 that the former company had purchased an LNG cargo from an undisclosed location in the U.S., which will be delivered to the Świnoujście LNG terminal in Poland. After regasification, the gas will be transported to the Polish-Ukrainian border.
Naftogaz said the gas will be transported to Ukraine in April and will be used to boost gas reserves ahead of the next heating season. Ukraine is among the largest storage players in Europe, with about 31 Bcm of capacity, but transparency data shared by Gas Infrastructure Europe (GIE) shows reserves are virtually depleted, with storage tanks less than 3% full. This means only cushion gas is left in storage.
To this end, Ukraine has signaled a strong interest in purchasing substantial volumes of U.S. LNG, and there are a number of import routes that could make this possible, in addition to Świnoujście.
The Klaipėda terminal in Lithuania is one obvious option as the regasified gas can then be transported via the 2 Bcm/a GIPL pipeline connecting Lithuania and Poland, and further through Poland to the interconnector on the Ukrainian border in Drozdowicze. Earlier in March, ORLEN and Naftogaz signed a Memorandum of Cooperation for 100 MMcm of regasified LNG to be delivered to Ukraine via this route.
According to Gas Transmission System Operator of Ukraine (GTSOU), available firm capacities for importing gas from Poland to Ukraine are about 6.4 MMcm/d per day or 2.3 Bcm/a, of which 5.15 MMcm/d is available for booking at quarterly, monthly, daily and within-day auctions. The remaining 1.25 MMcm/d is available only for daily auctions.
These capacities can be used to transport gas from LNG terminals in Poland, Lithuania and Germany, according to the TSO.
Substantial Capacity
But there are multiple other routes that can enable U.S. LNG to reach Ukraine.
Sergiy Makogon, a non-resident senior fellow at the Center for European Policy Analysis (CEPA) and who served as CEO of GTSOU from May 2019 to October 2022, tells P&GJ that Ukraine possesses substantial gas import capacity through its borders with EU countries and Moldova.
“The country's firm import capacity is approximately 52 million cubic meters per day. However, it's important to note that not all of this capacity is firm on a long-term basis, which could pose risks during supply crises,” he said.
Makogon notes that the Greece-Bulgaria-Romania-Ukraine route via the Trans-Balkan pipeline is one option for additional LNG volumes.
“Those terminals facilitate gas delivery to multiple countries, including Ukraine, via the Trans-Balkan pipeline system. This system utilizes existing interconnections between Greece/Turkey, Bulgaria, Romania and Ukraine,” he said.
Greece boasts two LNG import terminals, the 5.1 mtpa Revithoussa onshore terminal and the 4 mtpa Alexandroupolis Floating Storage Regasification Unit (FSRU). The U.S. supplied over 70% of the LNG unloaded at Revithoussa LNG Terminal in 2024, according to DESFA, the national TSO.
In December last year, private Ukrainian energy company DTEK said it had taken delivery of its first LNG cargo from the U.S., after the cargo docked at Revithoussa. DTEK said it expected this to be the first of a number of shipments from the U.S., and that the company is looking to expand its LNG activities into northern Europe and the Baltics.
The delivery in December followed a Heads of Agreement with Venture Global (VG) signed in June the same year, which stated that VG would supply short-term and long-term LNG from its Plaquemines and CP2 facilities.
The first delivery of U.S. LNG was subsequently regasified and channeled into the European Union gas networks, from where gas was then transferred to Ukraine's gas networks, Dmytro Sakharuk CEO of D. Trading, part of the DTEK Group, tells P&GJ.
“While direct transit to Ukraine via the Black Sea is currently restricted, D. Trading leverages existing European pipeline infrastructure, allowing swaps of gas through our portfolio in Central and Eastern Europe, to ensure the gas reaches Ukraine,” Sakharuk said.
As for Turkey, which is also a significant importer of U.S. LNG, the country boasts five LNG receiving terminals — two onshore and three FSRUs — totaling 30 mtpa of capacity.
To this end, GTSOU says it is working with other system operators to create commercially attractive gas transportation routes along the Trans-Balkan direction, from LNG terminals in Greece and Turkey. As of January 1, 2025, the capacity at the Grebenyky interconnection point for gas transport via Moldova to Ukraine on the Trans-Balkan corridor is 7 MMcm/d, or almost 2.6 Bcm/a.
Transportation Tariffs
However, the main remaining obstacle to boost utilization of the Trans-Balkan pipeline is high tariffs along the route, the TSO said in an e-mailed response to P&GJ.
The Trans-Balkan pipeline was completed in 1988 and historically its primary purpose was for Gazprom to transport Russian gas through Ukraine to supply Moldova, Romania, Bulgaria and Turkey with natural gas. Currently, only a fraction of the pipeline’s 36 Bcm/a capacity is used.
“From my point of view, the main obstacle in utilizing Greece as an entry point for LNG supplies to Ukraine lies in the very high transportation costs via the Trans-Balkan pipeline,” Makogon said. “Each transit country — Bulgaria, Romania and Moldova — charge unreasonably high transit fees. These substantial transit expenses significantly undermine the economic feasibility of importing LNG to Ukraine through Greek terminals, making such an arrangement economically unattractive despite available terminal capacity.”
The EU-backed Energy Community, which consists of countries in South East Europe, as well as Moldova and Ukraine, says it is currently identifying the barriers to negotiating lower transportation tariffs on the Trans-Balkan route and that it will propose solutions by the end of May.
To this end, Sakharuk notes that the TSOs from Greece (DESFA), Bulgaria (Bulgartransgaz), Romania (Transgaz), Moldova (VestMoldTransgaz), and Ukraine (GTSOU) have reached an agreement to offer a joint capacity product under the Trans-Balkan Corridor.
“This initiative will enable market participants to book capacity along the entire route via a single auction, facilitating streamlined access 3 million cubic meters per day of capacity from Greece to Ukraine,” he said.
Critically, this product will be offered at a discounted reserve price, Sakharuk added.
“The total cost of transporting regasified LNG from the Revithoussa terminal in Greece to Ukrainian underground gas storage facilities could drop to €10/MWh, significantly improving the route’s commercial viability,” he said.
Meanwhile, there are available firm capacities for gas transportation from Hungary to Ukraine, in the amount of 9.8 MMcm/d, which can be used for gas transportation from the Krk LNG terminal in Croatia, as well as firm capacities of 42 MMcm/d for gas transportation from Slovakia to Ukraine, according to GTSOU.
Boosting U.S. LNG supplies to Ukraine does not just hinge on available pipeline capacity. The level of available regasification capacity at LNG terminals may also determine how much in additional volumes that can be imported. According to the operator of the Krk terminal, there is no additional long-term capacity available before the gas year 2037-38.
The utilization rate of the terminal is high — over 80% of total capacity, in the period of April 5, 2024, to April 5, 2025 — according to GIE data. At Świnoujście, the utilization rate was close to 90% in the same period. Elsewhere, however, there seems to be more availability. The utilization rate at Greece’s import terminals, for example, was around 20% of total capacity in the same period.
Another issue is the state of the Ukrainian gas network and the possibility to transport the gas over long distances to reach demand centers in the country. GTSOU says that, despite the attacks of the Russian forces on the energy infrastructure of Ukraine, it continues to fulfil its obligations to network users.
Makogon said, “The ongoing conflict has undoubtedly impacted Ukraine's gas infrastructure. Russian missile strikes have targeted gas production facilities, leading to significant reductions in domestic output — sometimes by as much as 40%,” Makogon said, adding, “Despite these challenges, Ukraine's gas transmission system has demonstrated resilience. The network continues to function, enabling the transportation of imported gas to domestic demand centers.”
Makogon notes that, in recent months, Ukraine has been actively importing gas to compensate for domestic production losses due to infrastructure attacks. For instance, plans were made to import up to 800 MMcm of gas from Europe in February and March 2025.
Attacks Intensify
Russian forces have so far not been targeting Ukraine’s 146 Bcm transit route that used to transport Russian gas to European customers, before the transit agreement expired at the start of this year.
But the Russian military appears to be ramping up attacks on distributions networks and production facilities in Ukraine.
In late March, Naftogaz reported the 18th coordinated Russian attack on its infrastructure since the start of the full-scale war — the 8th one this year. This came a few weeks after DTEK announced its gas production facilities in the Poltava region had halted operations after they were attacked.
Artem Petrenko, Executive Director of the Association of Gas Producers of Ukraine, tells P&GJ that since January 2025, the Russian military has intensified its attacks on Ukrainian gas production facilities, particularly in the eastern regions.
“While strikes on the sector have occurred since the early days of the full-scale invasion, this year they have become more targeted and large-scale,” he said.
In 2024, Ukraine produced almost 19 Bcm of natural gas, which was about 2% higher than the previous year.
“Prior to the large-scale Russian attacks, gas output was increasing among both state and private producers,” said Petrenko. “However, several of this year’s strikes by the aggressor on production facilities and gas infrastructure have caused significant destruction and damage. As a result, they have had a notable impact on production volumes and the overall gas balance in the country.”
Petrenko noted that Ukrainian producers are doing everything possible to eliminate the consequences of the attacks as quickly as possible.
“However, this requires, firstly, many months of work, and secondly, substantial investment. In some cases, the damage is beyond repair, and infrastructure must be rebuilt from scratch,” he said. ‘This includes gas pipelines, compressor stations, gas treatment facilities and more. The funds companies are currently spending on recovery efforts could otherwise be invested in new drilling, exploration and increasing domestic gas output.”
Another challenge for producers in Ukraine is the increase in transportation tariffs on the gas network which was approved by the National Energy and Utilities Regulatory Commission (NEURC) in December last year.
The new entry/exit tariffs took effect on Jan. 1 and will remain in place through 2029, Petrenko said.
“Their significant increase is directly impacting producers and the industrial sector — the primary users of gas transportation services. Household consumers are not directly affected due to a moratorium on tariff hikes for the population,” he said. “However, they will feel the indirect effects through rising prices for goods produced by industrial enterprises.”
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