Ukraine's gas network operator Ukrtransgaz opens an underground gas storage customs warehouse

Local and international gas traders can store gas in Ukraine’s underground storage facilities without customs clearance for over 1,000 days

Ukraine's gas transmission system operator Ukrtransgaz launches a customs warehouse based on 10 underground gas storage (UGS) facilities, enabling gas traders to store natural gas for over 1000 days without customs clearance.

On 1 June 2017, following a year of joint efforts of Ukrtransgaz, Naftogaz, the Ministry of Finance, and the Power Customs Office of the State Fiscal Service of Ukraine, Ukrtransgaz was granted a permission to open and operate a customs warehouse using Ukraine’s UGS facilities.

The storage services are offered at the most competitive prices in Europe (approx. 0.4 EUR/MW per storage cycle).

“The launch of the customs gas warehouse in Ukraine is an important step in our long-term strategy to integrate into the European gas market and create an Eastern European gas hub based on Ukraine's vast and reliable gas transmission and storage infrastructure”, says Myroslav Khymko, acting President of Ukrtransgaz.

Previously, it was possible to clear natural gas transported to the customs territory of Ukraine only in the ‘customs transit’ mode. In this case, the Customs Code of Ukraine allows for 31 days to get the customs clearance for gas. These conditions were not economically attractive for most foreign gas traders.

From now on, customs clearance of the gas coming from abroad for storage at Ukrainian UGS facilities, will be performed in the ‘customs warehouse’ mode.

With the new option, all gas traders are able to store their gas in the Ukrainian territory for up to 1095 days without paying taxes and customs duties if the gas is going to be transported away from Ukraine. All legal barriers have been thus removed in Ukrainian regulations for providing non-residents with the services of gas storage in UGS facilities.

Ukrtransgaz operates the largest underground gas storage facilities in Europe with a total capacity of 31 bcm. In recent years the Ukrainian storage capacities have been used by less than 50%. The company plans to offer the available free storage capacities to foreign traders.

In particular, Ukrtransgaz intends to offer competitive gas storage services to the neighboring CEE countries that experience a deficit of gas storage capacities, including Poland, Hungary, Romania, Slovakia, and Moldova.These countries have a combined storage capacity of less than 4 bcm and have indicated their intentions to invest into the expansion of these capacities.

Corporate Communications Department

Other news