Ukraine might have to import 2 bcm of gas ahead of next winter - memorandum with the IMF

MOSCOW. April 3 (Interfax) - Ukraine night have to import about 2 billion cubic meters of natural gas ahead of the next winter season, according to a memorandum signed by Kiev and the International Monetary Fund on economic and financial policy, published on the IMF website.

"For the next heating season, about 2 bcm of additional gas imports [on top of internal resources] could be required under the baseline," the memorandum says.

It said gas import needs had been largely contained so far this year thanks to low domestic consumption, resilient domestic production and a mild winter.

Ukraine's Naftogaz has made progress in securing additional financing for gas imports through the European Bank for Reconstruction and Development and bilateral donors, the memorandum says.

It said potential budget support or Naftogaz related to gas imports and Public Service Obligation compensation in 2023 ought to be capped at UAH 60 billion or around 1% of GDP.

Naftogaz said in a presentation to holders of defaulted Eurobonds in March that a milder than expected winter led to a revision of the required gas imports in the current heating season from 2.9 bcm to 1 bcm. Thanks to international support, the holding imported 923 million cubic meters of natural gas for a 737 million euros in the period October 2022 to February 2023.

The company said it had used all available external financing to purchase gas, except for 75 million euros from an EBRD loan of 300 million euros under state guarantee, due to administrative problems.

Increasing gas production by 1 bcm is a priority for Naftogaz, company chief Alexei Chernyshov said at the beginning of March. If total gas production in Ukraine stands at over 18.5 bcm, it might be possible to do without imports altogether, he said.