Requirements for importing and storing natural gas in Ukraine

Importing and storing natural gas in Ukraine requires compliance with established regulations and the acquisition of the necessary permits. Ukraine has implemented clear rules for the supply and wholesale purchase and sale of natural gas, which are enshrined in relevant legislation, in particular the Law of Ukraine "On the Natural Gas Market."

For companies planning to import natural gas from Europe and use Ukrainian underground gas storage facilities (UGS) to store the resource, it is necessary to conclude mandatory agreements in advance and, in some cases, obtain licenses. Specifically, this refers to natural gas supply licenses, as well as agreements with the gas transmission system operator and the gas storage operator. Furthermore, a special customs regime for gas storage in a customs warehouse is available, which allows foreign and domestic clients to defer the payment of taxes and customs duties while storing imported gas.

Experts at the law firm Fedotov & Partners specialize in supporting natural gas importing companies and ensure the acquisition of all necessary permits and the conclusion of mandatory agreements for the import and storage of gas in Ukraine (including under the "customs warehouse" regime).

Who is authorized to provide natural gas storage services

Natural gas storage (i.e., injection into and withdrawal from storage facilities) is a licensed activity in Ukraine. According to the law, to be authorized to conduct gas storage activities, a company must obtain a license from the NEURC. The regulator (NEURC) has approved separate licensing conditions for gas storage. In particular, a gas storage license can only be obtained by an applicant after they have been certified as a gas storage operator (except in specific cases provided for by law). This means that only companies that meet the requirements for storage operators and have obtained the appropriate license may provide storage services.

In practice, the main operator of Ukraine's gas storage facilities is JSC "Ukrtransgaz" – this state-owned joint-stock company carries out natural gas storage activities based on a license issued by the NEURC. Other entities do not currently provide such services, although the law de jure allows for the certification of new UGS operators provided they meet established criteria. For clients (customers of storage services), a storage license is not required, as they do not carry out the business activity of storage themselves, but merely use the services of a licensed operator. Instead, such clients must enter into a relevant natural gas storage agreement with JSC "Ukrtransgaz."

Does a company intending to store natural gas need a license to conduct business activities related to natural gas storage?

Gas supply (i.e., the sale and delivery of gas to consumers) in Ukraine is a licensed activity. Only companies that have obtained a natural gas supply license have the right to supply gas. The license is issued by the NEURC and allows the supplier to freely enter into contracts with consumers throughout Ukraine. In accordance with Article 12 of the Law "On the Natural Gas Market," relations between suppliers and consumers are regulated by law, the Civil and Commercial Codes, as well as the Natural Gas Supply Rules, which are approved by the Regulator and are mandatory for all market participants. These Rules define standard contract terms, commercial metering procedures, the rights and obligations of the parties, and more.

It should be noted that obtaining a license for wholesale natural gas trading (not physical supply to consumers) is not required under Ukrainian law. In other words, if a company intends to purchase natural gas as an investment asset or for resale to a trader or supplier, obtaining a license is unnecessary.

However, the company will still need to enter into mandatory agreements with the Gas Transmission System Operator of Ukraine and JSC "Ukrtransgaz," as will be detailed below.

Importing natural gas into Ukraine

Gas imports are an important component of the Ukrainian market, especially since 2015, when direct gas purchases from Russia were halted. Today, gas imports from the EU have completely replaced the former Russian route: Ukraine receives resources from Western suppliers in neighboring European countries. Physically, imports take place via gas interconnectors on the borders with Slovakia, Hungary, and Poland, as well as through reverse-flow capabilities on other routes. For a company planning to import natural gas, the key is access to the gas transmission system to bring the resource into the country and, if necessary, to storage facilities for its safekeeping.

Required agreements and procedures for a gas importer:

• Agreement with the Gas Transmission System Operator of Ukraine. The importer (trader or consumer) must become a customer of gas transportation services by entering into an agreement with the Gas Transmission System Operator (GTSOU). Under this agreement, the GTS Operator provides services for transporting imported gas from the entry point (the state border) to internal exit points (the consumer or storage facility). The application for such an agreement and the submission of the necessary documents are carried out in accordance with the procedure established by the NEURC.
• Booking transmission capacity. After concluding the framework agreement, the importer books gas capacity at interstate connections for import. Ukraine is connected to a European booking platform where capacity auctions are held. A company must purchase sufficient capacity (hourly/daily/monthly, etc.) on the required route to ensure the transportation of its resource across the border. Booking is carried out in advance, based on planned import volumes.
• Compliance with quality and balancing requirements. Imported gas must meet Ukrainian quality standards (calorific value, impurity content, etc.). The GTS Operator monitors quality at the entry point. The importer also becomes a participant in the balancing market: they are obligated to submit nominations/renominations of volumes and avoid significant imbalances, or otherwise pay the cost of system balancing in accordance with the rules.
• Storage operator agreement (if required). If a company plans to store imported gas, it must enter into an agreement with JSC Ukrtransgaz, the operator of underground gas storage (UGS) facilities. Under this agreement, the customer is provided with services for gas injection into storage, storage for an agreed period, and subsequent withdrawal. The agreement specifies the storage tariff, maximum daily injection/withdrawal volumes, and other technical conditions. The UGS operator guarantees the preservation of a specific volume of gas and the maintenance of the pressure required for withdrawal.

Customs warehouse regime

One of the main advantages of using Ukrainian UGS facilities for non-residents (and residents under certain conditions) is the ability to store gas without the immediate payment of customs duties and taxes. The "customs warehouse" regime is a special customs procedure under which imported gas is placed in storage under customs control for up to 1,095 days (3 years). During this period, taxes and duties are not paid until the gas is released for free circulation or re-exported. This regime has made Ukrainian storage facilities attractive to European traders: as early as 2021, more than 3.5 billion m³ of gas from the EU was stored in Ukraine under the "customs warehouse" regime. The Gas Storage Operator of Ukraine, in cooperation with the State Customs Service, has simplified the clearance procedures: the process is now highly automated and digitized, which saves time for importers.

To use this regime, the importer submits a customs declaration with the "customs warehouse" status when importing gas. The gas is brought into the country and injected into the UGS without actual customs clearance. When the gas owner decides to sell it in Ukraine or use it themselves, they clear the gas under the "Import" customs regime, paying VAT and duties (if applicable). Alternatively, the gas can be re-exported back to the EU or another country within the permitted period without paying taxes in Ukraine. Thus, the customs warehouse regime allows companies to import gas from Europe during periods of low prices, store it in Ukrainian UGS facilities, and later, when prices rise, clear it for free circulation for sale or consumption. This is beneficial both for traders who profit from seasonal arbitrage and for Ukrainian industrial consumers who can purchase resources more cheaply in the summer and store gas for their needs in the winter to use during peak demand periods.

Example:

• Case 1: A European trader imports 100 million m³ of gas in July, when the price on the European market is at its lowest, and places it in a Ukrainian UGS facility under the "customs warehouse" regime. In January, when prices rise, the trader re-exports this gas to the EU or sells it to a Ukrainian consumer, paying taxes only at the time of sale. The benefit is the difference between the summer and winter prices, minus storage costs.
• Case 2: A Ukrainian industrial enterprise imports gas from the EU through its supplier in the summer and injects it into a UGS facility (possibly without customs clearance). In winter, the enterprise clears the gas for domestic circulation and uses it for production, saving money due to the lower purchase price in the summer. This ensures a stable supply and hedges against price fluctuations.
• Case 3: A new natural gas market participant plans to sell resources to Ukrainian consumers. The company obtains a supply license, enters into agreements with the GTS Operator of Ukraine and Ukrtransgaz, books transit capacity at the Slovak border, and imports gas. It sells part of the resource immediately to enterprises under supply contracts and places the surplus in storage (either cleared or under the customs warehouse regime) until a more favorable price is obtained. This strategy requires professional planning of logistical nuances and legal support to ensure that all components—licenses, contracts, and customs declarations—are properly executed and that the enterprise complies with licensing requirements.

Ukraine possesses the largest gas storage capacity in Europe, with a total active volume of Ukrainian UGS facilities of about 30 billion m³. Approximately one-third of this capacity is currently offered to foreign customers under the "customs warehouse" regime (about 10 billion m³). The rest is used to cover domestic market needs and strategic reserves for the heating season. As of the beginning of 2025, gas reserves in Ukraine's UGS facilities were sufficient for a stable winter. Ukraine has accumulated the necessary volume to meet the demand of the population and industry even under wartime conditions. According to Naftogaz of Ukraine, in 2023, it was possible to attract about 2.5 billion m³ of gas from foreign partners for storage in UGS facilities despite the risks of war. In total, more than 160 foreign companies from 32 countries use Ukrainian storage facilities to store gas under the "customs warehouse" regime.

Cost of natural gas storage services. Tariffs for gas injection and storage in Ukrainian UGS facilities are set at a competitive level to attract clients. The NEURC regulates the tariff caps, coordinating them with the UGS operator. As of 2024, the Ukrainian storage tariff was one of the lowest in Europe. For example, in 2017, Ukrtransgaz offered foreigners a price of about €4.2 per 1,000 m³ for the entire storage cycle (injection, storage, withdrawal). Subsequently, tariffs have changed slightly but remain competitive. In March 2024, the regulator decided to "freeze" gas storage tariffs until April 1, 2025, at the current level to stimulate greater imports and gas injection into Ukrainian UGS facilities. Thus, even as of the date of this article (September 2025), storage conditions remain attractive: foreign traders are actively using Ukrainian storage facilities, and Ukraine benefits from the utilization of its UGS facilities and its image as a reliable gas hub.

In conclusion, it should be emphasized that the import and storage of natural gas is a multi-stage process that requires proper legal preparation and support. The importing enterprise must enter into mandatory agreements with the GTS operator and the UGS operator, as well as comply with customs rules when importing the resource.

Proper organization of this process allows for the maximum utilization of the advantages of Ukrainian gas infrastructure—in particular, the large capacity of UGS facilities and the benefits of storing natural gas under the customs warehouse regime.

Our team at Fedotov & Partners has significant experience in providing legal support for gas import and storage projects. We help clients obtain the necessary licenses, establish interaction with GTS and UGS operators, prepare all contracts, and ensure full compliance with the requirements of Ukrainian legislation. By turning to us, you will be able to successfully implement natural gas import and storage projects in Ukraine—efficiently, safely, and with legal support at every step.

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