Achievements of Independent Ukrainian Industrial Gas

by Olha Povaliaieva
Thursday, January 27, 2022
Achievements of Independent Ukrainian Industrial Gas

History from largest gas importer to independent market participant

Suddenly, almost eight years ago, the Ukrainian government had to diversify its gas supply to the country.  First, Ukraine began to import gas from Hungary and Poland.

In 2015, Naftogaz, a state-owned company of Ukraine for the extraction, transportation, and processing of oil and natural gas, already bought gas from a dozen European countries. Among them:

  • Norwegian StatOil;
  • French GDF Suez;
  • German E.ON, RWE ta Hinsha.

In 2016, more than 20 Ukrainian companies imported gas from Europe. In 2017 – more than 50. But in 2020, Naftogaz was not the largest importer of gas for the first time in history. To this end, the government has introduced updated regulations for the wholesale gas market. Such a move eliminated corrupt schemes and provided a robust gas supply system.

In 2020, natural gas production in Ukraine was 19.7 billion m³. Ukraine also increased its gross natural gas consumption by 5.5% (by 1.55 billion m³) to 29.8 billion m³.

Today, the Ukrainian gas market is driven mainly by private companies. Private companies specializing in gas production in 2021 formed 26% of public reserves. In the autumn of 2021, the companies extracted 442 million m³ of natural gas. It is 6% more than in the same period last year. This was the monthly record for all the time of independent gas production in Ukraine.

Also, in 2021, the state organization Ukrgasvydobuvannya purchased a special permit for oil and gas extraction in South Ukraine (Sumska and Poltava region). The deal cost the organization $10.5 million.

Equally important was the event marked by signing an agreement with the Netherlands. The Ukrainian Ministry of energy and the Dutch company EP Ukraine B.V. signed two agreements on extracting hydrocarbons in Ukraine.

Having started independent gas history, Ukraine wanted to collect enough gas in underground warehouses for a stable gas supply in underground storage facilities, even in the worst conditions. Ukraine has met this challenge — the volume of the gas underground has been recorded for decades.

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