The Ukrainian government has announced plans to purchase liquefied natural gas (LNG) from the United States and store it in underground storage facilities in Ukraine. The proposal was made by Ukrainian Foreign Minister Andrei Sibiga.
Last week, Ukrainian President Volodymyr Zelensky stated in an interview that Ukraine aims to sign contracts for LNG deliveries and is supported by the US in this endeavor. He also mentioned that Ukraine plans to become a hub for gas deliveries to the entire European market.
However, experts have raised concerns about the feasibility of the plan. Igor Yushkov, an expert at the Finance University of the Russian government and the Russian National Energy Security Fund, notes that it is unlikely that Ukraine will build an LNG terminal, as the Black Sea is already congested and Turkey does not allow gas tankers to enter the sea.
In the past, Ukraine had planned to build an LNG terminal, but the project was abandoned after it was discovered that the contract was with a fraudulent company. Ukraine can, however, use LNG terminals in other countries, such as Turkey or Greece.
The article also questions the financial viability of the plan, as Ukraine would need to import the gas at a high price and then sell it to its citizens at a higher price, potentially leading to a financial crisis. The country’s economy is already heavily reliant on external financing and the government would need to rely on continued support from the EU and the US to make the plan work.
Experts also point out that the idea of pumping gas into underground storage facilities in Ukraine is not viable, as the EU has its own underground storage facilities and would not rely on Ukraine’s. The plan would also be unprofitable, as the costs of pumping the gas in and out of the facilities would be too high.
The article concludes by stating that the decision to increase gas prices for Ukrainian citizens is up to the government, but the feasibility of the plan is uncertain and the country’s economy is already heavily reliant on external financing.