Business news from Ukraine

CHP modernization is one of key priorities for 2024 – Naftogaz

22 March , 2024  

The modernization of CHP plants is one of the key priorities for 2024, which the management of Naftogaz Group discussed with the company’s Supervisory Board at an offsite meeting on March 20, 2024.

“The thermal generation facilities transferred to Naftogaz are in an extremely poor condition. They have not been modernized for years, and the war has also had a negative impact on their operation. In today’s environment, they cannot operate efficiently and ensure the proper level of reliability. Therefore, we need to find funds to modernize these facilities,” the Naftogaz Group website said on Thursday, citing its head Oleksiy Chernyshev.

Among the key priorities of the group this year, Naftogaz also highlighted the growth of gas and oil production, an increase in the volume of gas from foreign energy companies in Ukrainian underground storage facilities, the development of customer services for household consumers and the protection of facilities in times of war.

In particular, the group plans to increase natural gas production by 0.5 bcm this year and attract about 4 bcm of gas from foreign traders for storage in Ukrainian underground storage facilities, up from 2.5 bcm in 2023.

“As in the previous year, our top priority remains to increase our own Ukrainian gas and oil production. Our plan for 2024 is to increase natural gas production by at least half a billion cubic meters. We are increasing the pace of drilling new wells, using modern technologies for both subsoil exploration and direct gas production,” Chernyshov said.

As reported with reference to the head of Naftogaz, the group plans to produce 15 billion cubic meters of natural gas in 2024 at the expense of PJSC Ukrgasvydobuvannya (UGV) and PJSC Ukrnafta.

According to Chernyshev, in 2023, UGV produced 13.5 billion cubic meters of gas.

For his part, according to UGV CEO Oleh Tolmachov, in 2023, the company increased gas production by about 700 million cubic meters compared to 2022. In 2022, the company produced 12.5 billion cubic meters of natural gas (commercial).

“In 2023, Ukrnafta increased oil and condensate production by 3% (by 39.9 thousand tons) compared to 2022, to 1 million 409.9 thousand tons, and gas production by 5.8% (by 60.4 million cubic meters), to 1 billion 97.4 million cubic meters.

The Cabinet of Ministers of Ukraine decided to transfer six CHPPs from the State Property Fund to Naftogaz of Ukraine (Dniprovska in Kamianske, Mykolaivska, Kryvorizka, Khersonska, Odesa, and Centralized Metallurgical Plant of Sievierodonetska CHPP) in early August 2021. Later, the government decided to increase the authorized capital of the NJSC by UAH 646.248 million through an additional share issue by contributing additional stakes in these CHP plants.

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