Ukrgasbank provides $113 million loan to Naftogaz for gas purchase

The state-owned Ukrgasbank (UGB) has provided Naftogaz of Ukraine NJSC with a loan of $113 million (€96 million or UAH 4.7 billion), according to Naftogaz CEO Sergii Koretskyi.

According to Koretskyi, the funds are already being used to purchase natural gas to form sufficient reserves in underground storage facilities for the upcoming winter.

As reported earlier, another state-owned bank, PrivatBank, had also issued a similar loan to Naftogaz – $113 million (€96 million or UAH 4.7 billion).

Thus, the state-owned company has secured $225 million (UAH 9.4 billion) in loans from Ukrainian banks to purchase natural gas for the winter. Currently, Naftogaz is mainly buying imported gas, injecting nearly 25 mcm of imported resource per day into the “customs warehouse” of Ukrainian UGS facilities.

How much gas can be purchased?

At today’s European natural gas prices (around $400/tcm), the loans from Ukrgasbank and PrivatBank can cover approximately 560 mcm of natural gas. These funds would allow Naftogaz to import gas in August at the same pace as in July for about 20–25 days.

Naftogaz also notes that negotiations are ongoing with international financial institutions and partner countries.