Ukrgazvydobuvannia in January-July 2021 reduced gross production of natural gas by 5.2% (by 437 million cubic meters) compared to the same period in 2020, to 7.932 billion cubic meters, the press service of the company said.
According to its data, gross production for the seven months decreased by 5.1% (by 406 million cubic meters) compared to January-July 2020, to 7.493 billion cubic meters.
Underfulfillment of the production plan is 125 million cubic meters and 51 million cubic meters respectively
In July 2021, gross gas production decreased by 4.8% (by 57.5 million cubic meters) compared to July 2020, to 1.144 billion cubic meters, marketable – by 4.5% (by 50.8 million cubic meters), to 1.088 billion cubic meters.
To stabilize production indicators during January-July 2021, the company commissioned 25 new wells, carried out 80 well workovers, performed 321 coiled tubing operations, 71 hydraulic fracturing operations, carried out nine sidetracking operations, equipped a remote monitoring system for 197 high-production wells.
As reported, Ukrgazvydobuvannia, 100% of which belongs to NJSC Naftogaz Ukrainy, in 2020 reduced production of marketable gas by 1.2% (by 170 million cubic meters) compared to 2019, to 13.45 billion cubic meters, and the company’s gross production amounted to 14.23 billion cubic meters.
Transit of natural gas through the gas transmission system (GTS) of Ukraine in January-July 2021 amounted to 25.616 billion cubic meters, which is 14.1% less than in the same period in 2020 (29.82 billion cubic meters), according to the data of Gas Transmission System Operator of Ukraine (GTSOU).
In particular, in January, transit amounted to 3.863 billion cubic meters (124.6 million cubic meters per day), in February – 2.907 billion cubic meters (103.8 million cubic meters per day), in March – 3.694 billion cubic meters (119.2 million cubic meters per day), in April – 3.718 billion cubic meters (123.9 million cubic meters per day), in May – 3.86 billion cubic meters (124.5 million cubic meters per day), in June – 3.723 billion cubic meters (124.1 million cubic meters per day), in July – 3.851 billion cubic meters (124.2 million cubic meters per day).
According to the press service of the company, in particular, 23.3 billion cubic meters of gas were transported by transit in the western directions (Slovakia – 15.8 billion cubic meters, Hungary – 5.3 billion cubic meters, Poland – 2.2 billion cubic meters), in the south – 2.3 billion cubic meters (Moldova – 1.9 billion cubic meters, Romania – 400 million cubic meters).
GTSOU notes that in July Gazprom used all previously booked capacities, but showed no interest in additional transit capacities, despite the record growth in prices in European gas markets, as well as low volumes in European storage facilities and the planned stop of Yamal-Europe routes and Nord Stream 1.
According to GTSOU Director General Serhiy Makogon, Gazprom is emptying its UGS facilities in Europe in order to compensate Europeans for the lost gas volumes, and at the same time not to increase additional transit through Ukraine.
Ukraine has recently lost about 17,000 gas distribution networks that have groundlessly ended up in private ownership, National Security and Defense Council (NSDC) Secretary Oleksiy Danilov said.
“Unfortunately, we must say that recently, in some amazing way, the government has lost 16,920 kilometers of networks, which have passed into private ownership. We see no reason today not to deal with this issue and intend to find out how this happened,” he said at a briefing on the results of the NSDC meeting in Kramatorsk on Friday, July 30.
At the same time, he said the gas distribution market segment is distinguished by the monopoly position of one group of companies owned by businessman Dmytro Firtash, due to which the NSDC will instruct the Cabinet of Ministers to check their activities.
“One of the companies owns 70% of regional gas companies. This directly concerns Mr. Firtash, against whom personal sanctions have been imposed. We will also deal with this issue. By the decision of the NSDC, we will instruct the Cabinet of Ministers to check all these things in order to bring them into line with the current legislation. We will not allow someone as a state to blackmail us and distort bills,” Danilov said.
The State Service of Geology and Subsoil of Ukraine has put up for electronic auction five hydrocarbon sites with a total starting cost of UAH 207.8 million (excluding the cost of geological documentation), the authority has said.
At the auction on October 20, 2021, in particular, Pivdenno-Rusanivska area (Sumy and Poltava regions) was put up for UAH 92.5 million (hereinafter without VAT), Zhukivska area (Poltava region) – for UAH 5.306 million, the Kitvan area (Ivano-Frankivsk region) – for UAH 1.925 million, Reshetylivska area (Poltava region) – for UAH 2.229 million and Tynivske area for UAH 107.847 million.
As reported, following the results of electronic trading in 2020, the State Service of Geology and Subsoil attracted UAH 826 million of direct revenues to the state budget. In 2021, a plan was announced to receive at least UAH 750 million.
The European Bank for Reconstruction and Development (EBRD) and the Gas Transmission System Operator of Ukraine (GTSOU) have signed an agreement to formalise their cooperation on low-carbon hydrogen and to develop hydrogen supply chains.
“I am very pleased that the EBRD and GTSOU are cooperating to support each other’s activities regarding hydrogen. Ukraine relies heavily on fossil fuels across all sectors of its economy and hydrogen can represent a good alternative for decarbonisation, and reduce reliance on fossil fuels. Supporting the green transition of our economies is a key priority for the EBRD,” EBRD Managing Director for Green Economy and Climate Action Harry Boyd-Carpenter said.
CEO of GTSOU Sergiy Makogon said that the challenge of hydrogen therefore is to develop technology to scale up hydrogen use, to create the necessary conditions and infrastructure for its production, transportation and consumption.
“All this requires time, effort and cooperation by all stakeholders. We recognise the role of natural gas as one of the key energy sources and transition fuel on the path to carbon-free economy, which will remain significant for this transition period. As the operator of the gas transmission system, our task is now to prepare our infrastructure for the decarbonised energy markets of the future,” he said.
According to the report, the EBRD recently launched a study on the potential for developing different segments of the hydrogen supply chain across many of the economies where it invests, including Ukraine.
NJSC Naftogaz Ukrainy plans to actively develop the function of gas trading and from the organized market to become a market maker on it, Head of its board Yuriy Vitrenko announced the company’s plans at the 12th International Ukrainian Energy Forum of the Adam Smith Institute in Kyiv.
“Naftogaz will develop full-fledged trading […] In the future, we want to build a full-fledged trading function as part of Naftogaz. We see the need to work in the market and become a market maker, provide liquidity to the Ukrainian gas market and ensure the construction of a platform on which everyone can offer standardized products,” he said.
Vitrenko said that over the past few years, Naftogaz has been selling mainly gas of its own production and certain volumes of gas from storage facilities.
“I would not call it trading at all,” the head of the board said.
Commenting on the plans for the development of trading on the sidelines of the forum, Vitrenko said that Naftogaz, as a national company responsible for energy security, must ensure the priority of using its own gas to meet the needs of domestic consumers, the population.
“We produce approximately 15 billion cubic meters of gas [per year]. The population consumes about 12 billion cubic meters of gas through heat supply and direct consumption. Therefore, in principle, our own gas should be considered as a strategic resource to meet the needs of the population,” the head of Naftogaz board said.
At the same time, he said this does not mean that there should be no market and market pricing in this segment.
“But from the point of view of security of supplies, we must understand that this resource is primarily for the population,” Vitrenko said.
With regard to the imported resource, he said that Naftogaz considers it from the point of view of how much the market needs insurance from the national company to ensure sufficient volumes of gas on the wholesale market for the needs of the industry.
“But even in this segment, we understand that our responsibility, as a national company, is to develop the market, to be a so-called market maker: to provide real liquidity and real development of the market,” the head of the company’s board said.
According to him, currently Naftogaz sells gas on the Ukrainian Energy Exchange, but until there are opportunities for real trading, in accordance with international standards, it is difficult for the company to be a market maker in the market.
