Ukraine Government Asks US To Provide 'Gas Lend-Lease'

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by Tyler Durden
Wednesday, Jul 27, 2022 - 05:15 PM

Authored by Dave DeCamp via,

The Ukrainian government on Tuesday asked Washington to provide Kyiv with a "lend-lease" program to import natural gas from the US to ensure Ukraine has enough gas for heating this winter, Prime Minister Denis Shmyhal indicated.

The idea is for the US to provide gas to Ukraine and collect payment at a later time, similar to the World War II-era lend-lease program that was revived this year to facilitate military aid to Ukraine.

Via Reuters

"Preparation for the most difficult winter in our history continues, and in this preparation we are looking for all possible tools to be ready for any scenario," Shmyhal wrote on Telegram.

According to Foreign Policy, one of the proposals that has been floated by Ukrainian officials would be for the US to provide Ukraine with 6 billion cubic meters of liquefied natural gas (LNG) without collecting payment for two years. The US would deliver the LNG to terminals in Europe, where it will be shipped to Ukraine via pipeline.

Yuriy Vitrenko, the CEO of the Ukrainian state-owned gas company Naftogaz, discussed the lend-lease proposal in Washington earlier this month. "They were surprised to hear such an idea, but it was well received," Vitrenko said.

It’s estimated that the 6 billion cubic meters of LNG would cost about $8 billion. So far, the US has authorized $54 billion to spend on the war in Ukraine, more than half of which is for military aid. But the US is expected to spend more as the current funding is only meant to last through September 30.

Meanwhile Bloomberg reviews of Russian energy giant Gazprom drastically reducing natural gas supplies since mid-June and into this week, "Moscow is likely restrict gas supplies to Europe as long as the standoff over Ukraine continues, ratcheting up the pressure on the EU over its tough stance on Russia’s invasion, according to people familiar with the leadership’s thinking in Moscow." The report notes: "The exits of British and Italian prime ministers Boris Johnson and Mario Draghi highlight the potential for policy change."