Ukraine's gas imports from Europe in the first seven months of 2020 rose by 21% year on year to 9.2 Bcm, gas grid operator GTSOU said Aug. 7.
The volumes were also 48% higher than the average EU imports in 2016-2019, it said.
During the period, imports from Slovakia were some 5.4 Bcm -- a 16% year-on-year increase -- deliveries from Hungary rose 26% to 2.7 Bcm, while imports from Poland were up 33% at 1.1 Bcm.
The volumes included virtual reverse flows, which became available for the first time this year, totaling 1.7 Bcm from Hungary, 0.7 Bcm from Poland and 0.2 Bcm from Slovakia, which saw its first virtual reverse flow in July.
Under the practice, Russian gas that previously would have left Ukraine to enter eastern Europe before being sent back to Ukraine for domestic use or storage can now remain in Ukraine.
GTSOU said imports from Europe since the beginning of August have also hit an all-time high, with supplies reaching 107 million cu m/d.
Ukraine halted direct purchases from Russia in November 2015.
Storage injections
GTSOU said the increase in imports this year was due to a major rise in demand for gas storage under Ukraine's "Customs Warehouse" regime, which allows gas to be stored for up to three years net of taxes and customs duties.
Around 5.4 Bcm of the volumes imported by Ukraine in the January-July period were injected into Ukraine's gas storage facilities under that regime, GTSOU said.
Of that volume, some 2.9 Bcm was imported in "short-haul" mode, it added.
Ukraine had made it easier and cheaper for market players to exploit its spare storage capacity since the start of 2020, with a series of incentives and agreements allowing gas to travel more easily through the country and into its storage sites from Central and Eastern Europe.
GTSOU said 69 traders had booked gas transmission capacity from the EU to Ukraine in January-July, including 44 Ukrainian companies and 25 foreign companies.
A total of 52 customers used the short-haul service and the "Customs Warehouse" storage mode, including 24 residents and 28 non-resident, it said.
"Due to restricted capacities available at European storages and attractive tariffs and services in Ukraine, this year Ukraine is breaking records for gas intakes into underground storage facilities and is taking an important step toward development as a European gas hub," GTSOU said.
General director Sergiy Makogon added: "It is now confirmed in practice that European gas market rules bring real benefits to the state, when they are properly implemented, and stimulate the development of the internal market."
"We plan to further improve and create new opportunities at all interconnection points of the Ukrainian system for complete integration with European markets," he said.
Indirect purchasing?
Both the Ukrainian TSO and state-owned gas company Naftogaz have repeatedly said that they have not directly imported Russian gas since 2015, with the latter insisting it had no intention of doing so unless considerably more favorable pricing terms were agreed.
This may well be the case, but the GTSOU data indicates that not all shippers active at EU borders are sending gas to Ukraine for storage.
It follows that this gas is being shipped across the border to Ukraine under bilateral trading agreements, or being sold into the country's nascent gas market, within the Ukraine Energy Exchange.
GTSOU's latest figures show that the country's injections were only 59% as a percentage of total imports. Of that, only 54% were made using the beneficial short-haul service, which would reduce the transport cost of an already convoluted transport route.
Back in July, data sent by GTSOU to S&P Global Platts revealed that 59% of imports were transported using both the Customs Warehouse and Short-Haul services into storage in H1 July, while storage injections were 83% as a percentage of total imports.
These percentages are likely to be higher in August, given the increasing magnitude of imports, although the TSO is yet to release data for the current delivery month.
Data from S&P Global Platts Analytics shows storage injections are currently taking place at the rate of 107 million cu m/d, the exact quantity GTSOU says is being imported.
However, the number of Ukrainian companies involved in the operation, and the discrepancy between Slovakian exports and Ukrainian injection would suggest that indirect purchases could still be occurring, where ownership of gas is transferred at the border.
Remarkably, this does not rule out Russia's Gazprom Export being involved in this activity.
While Gazprom Export is currently satisfying purchases at the Slovakian and Czech virtual Trading Points using substantially increased flows from Germany, exports to Ukraine have predated not only this but the heightened level of Ukrainian injections.
Even if Ukraine does not directly import Russian gas, it may be doing so in all but name.
GTSOU did not respond to requests for comment on this subject.
