Ukraine needs help to import up to 6 bcm of gas, lend-lease under discussion - Naftogaz head

WASHINGTON. June 8 (Interfax) - Ukraine's gas sector remains in working condition but it needs external assistance to prepare for storing natural gas for the next heating season, the head of Naftogaz Ukraine, Yuriy Vitrenko said.

Ukraine will "need again help for the next heating season," because it will "need to import up to 6 billion cubic meters of gas," Ukrainian media outlets quoted Vitrenko as saying at a meeting of the U.S. Commission on Security and Cooperation in Europe (Helsinki Commission) in Washington on Tuesday evening.

"At current market prices this is about $8 billion," he said. This is a "big challenge" for Ukraine, but it is working with the United States government on finding "more commercial ways, export financing, guarantees, even considering such an option as using gas as a part of a lend-lease...," Vitrenko said.

He said Ukraine's oil infrastructure has been hit hard, with two oil refineries virtually destroyed, and tank farms and other oil infrastructure badly damaged.

But in terms of gas infrastructure, in areas where there is no fighting Ukraine is continuing to produce, store and transport gas, Vitrenko said. "Even some brave European companies since the beginning of the war brought some gas to store in our underground gas storage facilities," he added.

The Ukrainian government on Tuesday ordered Naftogaz to increase gas reserves in underground storage to 19 bcm by the start of the 2022-2023 heating season from the current 10 bcm.

Ukrainian Prime Minister Denys Shmyhal said the government estimates the country's own production at 16 bcm-19 bcm and consumption at 21 bcm-24 bcm. "Accordingly, we will import some gas. There is capacity for this. We also have agreements with our neighbors in the West," he said.

President Volodymyr Zelensky said in a video address that the government is setting up a command center to prepare for the next heating season. He said this decision was made following a meeting he held with representatives of the government, energy companies and regulators.

"We discussed the issue of buying a sufficient amount of gas for the heating season, coal, electricity production," Zelensky said. At this time Ukraine will not export its gas and coal, as all domestic production will be used for domestic consumption, he said.

"At the same time, we're doing everything we can to increase our ability to export electricity, which existing capacity in Ukraine allows, and after the historic connection of our country to the unified energy network of Europe such exports not only make it possible to increase our foreign currency revenue, but directly influence the stabilization of the energy situation in countries that are reducing consumption of Russian resources," Zelensky said.

"I have set a concrete objective for the government - that rates for gas and electricity not change in the next heating season. Local authorities are responsible for rates for heat and hot water and the same stability of rates must be ensured at the local level," Zelensky said.