Ukrainian energy officials are in a race against time to secure funding for natural gas imports to heat homes and power businesses this winter as Russia continues its grinding military offensive in the Donbas. Top energy executives from Ukraine are pitching Washington and other Western capitals on a raft of potential solutions to secure supplies to last through the upcoming winter and boost domestic production.
This includes proposals to secure international financing to buy natural gas from major exporters in the Middle East and North Africa, developing alternative supply routes, and a possible “lend-lease” agreement with Washington to import US liquefied natural gas (LNG).
As Ukraine’s industry has shrunk due to the war and 7 million people have fled the country, demand for gas has actually decreased -- but so too has the country’s ability to pay for imports amid rising prices and a government shortfall of US$5 billion per month. Naftogaz CEO Yuriy Vitrenko, who was in Washington last week for meetings with the Biden administration, said Ukraine needs US$8 billion in financing to fund the import of 6 billion cubic meters of gas before the winter. Before the war, Ukraine consumed 30 billion cubic meters of gas per year, a third of which was imported. Some 90% of Ukrainian homes are reliant on gas heating, and gas serves as a backup source of energy for many of the country’s power plants.