Ukraine loses 60% of gas production, faces winter energy crisis
Kiev has informed its Western partners that Russian attacks have destroyed more than half of its gas production capacity, forcing the government to seek emergency imports worth more than $2 billion to avert a severe energy crisis in the coming winter, Bloomberg reported.
The news agency on October 9 quoted informed sources as saying that Kiev informed Western donors this week that a Russian missile attack on the Kharkiv and Poltava regions on October 3 had destroyed about 60% of Ukraine's gas production capacity.
Earlier, the Russian Defense Ministry said that on the night of October 3, its forces had carried out a "large-scale attack" on Ukraine's military-industrial complex and the energy facilities that support its activities. Moscow asserted that the attacks were in response to Ukraine's actions against Russia's energy infrastructure and residential areas, and claimed that it had only targeted locations related to Ukraine's military infrastructure.
The consequences of the attack are dire. According to Bloomberg, Ukraine is expected to need to buy about 4.4 billion cubic meters of gas, worth 1.9 billion euros ($2.2 billion), to get through the winter. That represents nearly 20% of the country’s total annual consumption. Kiev is now seeking financial assistance from the West to finance the huge imports.
Ukrainian state energy company Naftogaz said recent loans – including 500 million euros from the European Bank for Reconstruction and Development (EBRD) in August and 300 million euros from the European Investment Bank (EIB) this month – were not enough to cover the losses.
In addition to financial aid, Ukraine has also asked the G7 to provide energy repair equipment and repeated its request to be equipped with modern air defense systems.
The situation is not just affecting Ukraine, but also threatens to spread to Europe. Bloomberg notes that the European Union’s need to increase gas supplies to Ukraine could strain the bloc’s market. These concerns pushed gas prices up earlier this week. With reserves well below historical averages, the EU remains vulnerable to supply shocks. A cold winter could quickly deplete reserves and trigger new price spikes, adding to the pressure on consumers.
Russia began attacking Ukraine's power grid and gas production facilities after Kiev allegedly bombed the Crimean bridge in October 2022. President Vladimir Putin has said Russia will respond to Ukrainian attacks on its energy facilities, which have increased over the past year.
