KIEV, May 17 ??“ Naftogaz Ukrayiny, the national oil and gas company, has been sharply lagging behind the schedule in building up winter gas reserves that may undermine its gas distribution business, a newspaper reported.

Naftogaz purchased only 1.5 billion cubic meters of gas for the reserves during the past 2.5 months, down from 9 billion that had been originally planned, Kommersant reported citing a source.

At the same time, Russian gas giant Gazprom and its gas trader RosUkrEnergo have been rapidly increasing amount of gas they keep in Ukrainian underground gas tanks, the source said.

Gazprom increased reserves to 9.4 billion cu m as of early May from 1.2 billion as of early January, while RosUkrEnergo boosted its reserves to 15 billion cu m from 9 billion cu m.

The development may lead to a situation when Naftogaz will run out of gas before the high demand season starts Oct. 15 and most of gas in Ukraine will be distributed by RosUkrEnergo??™s subsidiary.

???Gazprom and RosUkrEnergo will not have problems with gas in underground gas tanks,??? Mykhaylo Volynets, a member of Parliament??™s energy committee, said. ???They will gradually seize the Ukrainian market by supplying gas to consumers directly.???

A spokesman at Naftogaz confirmed the company has been facing difficulties in purchasing gas for the winter reserves, but had refused to elaborate whether its gas distribution business was in jeopardy.

Gazprom has long been planning to enter gas distribution business in Ukraine, but the Ukrainian government had so far prevented that. As a compromise with Russia earlier this year, Ukraine has allowed UkrGazEnergo, a 50-50 joint venture between RosUkrEnergo and Naftogaz, to start distributing gas in Ukraine.

Energy and Fuel Minister Ivan Plachkov played down the fears of possible gas shortages and said there was enough gas to meet Ukraine??™s growing demand during the heating season.

But Ukraine has been also taking steps to secure greater purchases of gas for the winter reserves. ???We are signing additional contracts for purchases of gas for the winter reserves,??? Plachkov said.

Meanwhile, even if Naftogaz buys extra gas, it will probably not be able to pump it all into the underground tanks before the deadline of Oct. 15 due to technical constrains, analysts said.

Naftogaz is supposed to have at least 18 billion cu m of gas by Oct. 15, which means the company would have to spend more than $1.5 billion to buy the required gas.

Naftogaz was reported to be having difficulties in March and April for paying for gas supplied by RosUkrEnergo, Ukraine??™s only supplier of gas. (tl/ez)