Ukraine Bets on US Lng as Gas Import Needs Rise

Ukraine Turns to US LNG to Meet Rising Gas Import Needs

By Pavel Polityuk

KYIV (Reuters) -Ukraine may import large volumes of U.S. gas this year via terminals in Germany, Greece, Lithuania and Poland, its state gas operator said, as Kyiv struggles with the impact of Russian attacks on its infrastructure.

The White House has spearheaded talks to end the more than three years of war that have followed Russia's invasion of Ukraine. Kyiv said it was willing to accept a ceasefire proposal on Tuesday, but Moscow has yet to agree to a deal.

U.S. imports of gas into Ukraine have the potential to strengthen an economic partnership with Washington and the presence of U.S. gas in Ukraine's storage facilities could deter Russian attacks.

Dmytro Lyppa, the head of Ukraine's gas operator, told Reuters in an interview Ukraine could import at least 4 billion cubic metres of gas between April and October.

Reuters calculations based on average prices for gas find the total imports bill would be at least $1 billion.

Of the total imported via Europe, up to half would be made up of LNG shipped to European terminals, rather than pipeline gas, and of this, Lyppa said as much as possible could be from the United States.

"If we take the political aspect, it is better for us to bring as much (U.S. LNG) as possible to Poland and gradually bring it to us," Lyppa said in an interview cleared for publication on Wednesday.

The geopolitical situation meant that U.S. LNG could be preferred over rival Qatari LNG, for instance, Lyppa said, provided the price difference was not significant.

END TO RUSSIAN TRANSIT

Ukraine was a major pipeline transit route for Russian gas until the beginning of this year, when the transit deal between the two countries expired, depriving Russia of revenues from transit fees.

Ukraine also has large underground gas storage facilities, and President Volodymyr Zelenskiy said Kyiv and the White House have discussed using the sites to store U.S. LNG that could replace some of the western European gas on which Ukraine relies.

Russian forces have intensified attacks on Ukrainian gas infrastructure - production and underground storage facilities - in recent weeks, reducing Ukraine's gas production and limiting its ability to remove fuel from storage.

Ukraine was producing 52-53 million cubic metres of gas per day before the latest attacks, but a senior industry source said the attacks reduced production by up to 40%, forcing Kyiv to increase imports. Some output has been restored, but officials have declined to give updated figures.

In preparation for the 2025-26 winter heating season, Ukraine typically starts pumping gas into storage when the current peak demand season ends around April as temperatures rise and consumption begins to decline.

Energy officials have estimated Ukraine needs to have at least 13 bcm of gas in reserve by mid-October for the winter season to run smoothly.

Lyppa said that LNG could be supplied to Ukraine from terminals in Germany, Greece, Lithuania and Poland.

The Polish and Lithuanian routes were the cheapest, but Lyppa said Ukraine would also have to use other pipelines as the Polish interconnector allows the import of only up to 7 million cubic metres per day, compared with demand of 20-25 million.

($1 = 0.9158 euros)

(Reporting by Pavel Polityuk; editing by Barbara Lewis)