Ukraine to buy US gas for first time

Kiev is seeking to shift away from Russian pipeline gas despite a lack of regasification facilities for LNG imports

Ukraine’s largest private energy company said on Thursday it had signed a comprehensive deal with a US firm to deliver liquefied natural gas (LNG) to Ukraine and Eastern Europe.

The deal marks the first major agreement to supply the supercooled fuel to Ukraine as Kiev seeks to boost its energy security and reduce Russian energy dominance in the region.

The DTEK Group’s commodity trading subsidiary, D.Trading, is expected to purchase cargoes from a Louisiana-based LNG facility operated by US energy exporter Venture Global, according to the statement released by the Ukrainian firm. It added that the deal was struck at the Ukraine Recovery Conference in Berlin earlier this week.

“With this landmark agreement, we will help bolster Ukraine’s security of natural gas supply, aid continued recovery and economic growth in the region, and further strengthen European energy security,” D.Trading CEO Ivan Geliukh said, adding that the deal covers supplies on a short-term and long-term basis.

The Ukrainian company will start the imports later this year and continue to buy the fuel through 2026, the Financial Times reported. Moreover, D.Trading will purchase up to two million tons of LNG annually for 20 years from another Venture Global facility, Reuters said.

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Ukraine currently has no regasification terminals for LNG, but DTEK has reportedly signed contracts for the use of capacities located in European states that have pipeline connections to the country.

Kiev previously said it would not prolong a five-year deal with Russia’s energy giant Gazprom on the transit of Russian pipeline gas to Europe after it expires at the end of this year, and that it is exploring options for alternative supplies.

Earlier this week, Ukraine’s Vladimir Zelensky said around 80% of the country’s energy capacity, including coal-fired power plants and some hydroelectric power, had been destroyed or damaged due to the conflict with Russia. The Ukrainian leader also said Kiev needs more air defense systems to better protect its power infrastructure.

In recent months Russia has intensified its strikes on Ukrainian military and energy facilities. The Russian Defense Ministry has said the bombardment is a response to Kiev’s attempts to target Russian oil infrastructure. Since January, Ukraine’s military forces have launched multiple long-range attacks on energy facilities deep inside Russia, including oil depots and refineries, using kamikaze drones.