Ukraine increases gas imports from Poland and Hungary. Domestic production falls short

Since the beginning of the month, Ukraine has nearly doubled its imports of natural gas from abroad. The transit routes through which gas enters the country from Hungary and Poland are therefore operating close to capacity. Domestic production is not enough to meet demand because of Russian attacks on the country’s energy infrastructure, so Ukraine may also have to import gas from other neighboring countries.

Since the beginning of May, Ukraine has increased its net imports of natural gas to around 140 GWh per day. According to Argus, this is nearly double the average of 73 GWh per day in April. The increase is being driven primarily by stronger imports from Hungary, which have reached 103 GWh per day, close to the maximum. Flows from Poland have also risen, though by less.

Gas imports will likely have to increase further. Naftogaz estimates that Ukraine will need to import around 50 TWh of gas over the summer. If net imports averaged only 140 GWh per day, the country would manage to import only half that volume by mid-October, around the start of the heating season.

With capacity at the Hungarian and Polish borders essentially exhausted, Ukraine would have to meet any additional import needs by bringing in gas from Romania or Slovakia. However, these routes are relatively expensive, according to Argus. Even if imports were increased to a level in line with Naftogaz’s estimates, the country could still face a gas shortage during the winter.

Ukraine began injecting gas into storage facilities in mid-April. Their fill levels after the winter were the lowest in at least ten years. According to Argus, Naftogaz has managed to restore around half of the production lost during Russian attacks over the winter, but Ukraine’s domestic gas production remains below pre-war levels.

Domestic production should eventually meet all of the country’s needs

In recent months, Ukraine has faced intense attacks on its energy infrastructure, which have also had a negative impact on domestic gas production. However, the National Bank of Ukraine expects gas production in the country to grow in the coming years.

It is unlikely to reach a level that would ensure independence from imports within the next few years. At the end of last month, the bank said that the country will have to buy nearly $3 billion worth of gas abroad this year.