Business news from Ukraine


NJSC Naftogaz Ukrainy in 2020 rendered services to PJSC Gazprom (Russia) in organizing transportation of natural gas through the territory of Ukraine for $ 2.11 billion.
“For 2020, Gazprom fully paid for the annual capacity of the Ukrainian gas transmission system (GTS) for gas transportation. According to the agreement dated December 31, 2019 between Naftogaz and Gazprom, the cost of booking 65 billion cubic meters of annual capacity is $ 2.1 billion. In addition, in the fourth quarter of 2020, Naftogaz additionally rendered services to Gazprom for the use of the Ukrainian gas transportation system, for which it receives over $ 30 million,” the press release of the company said.
According to the company, the total volume of Russian gas transported in 2020 amounted to 55.8 billion cubic meters.

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Smart Energy increased its summary gas production by 8.6% in 2020 year-over-year, to 400.6 million cubic meters, the press service of the group has reported.
In addition, condensate production grew by 4.8%, to 34,700 tonnes.
“Increase of overall production volumes by Smart Energy in 2020 is a result of wells No. 61 and No. 62 launch after workovers at Ostroverkhivske field as well as new volumes of hydrocarbons, resulted with launch of a new well (No. 54) at Svyrydivske field in May of 2020. Meanwhile, a decline in production rates from well No. 10 of Vasyshchivske field continues due to the natural depletion. Therefore, in Q1, 2020, compression equipment was installed to increase production from Vasyshchivske field. And workover is planned to commence in late Q1 of 2021 to access an alternative reservoir horizon, with the aim of boosting production from this well,” the press service said.
Last year the group completed drilling a new well, completed two workovers, installed two new compressors, received the grant of extension of two licenses, and become an owner of a new licence for Svystunkivsko-Chervonolutske field through acquisition of Arkona Gas-Energy LLC.
For the reported period well No. 25 at Svyrydivske field has been drilled to its target depth of 5,320 metres, and logging and completion operations have been performed. It is anticipated that initial testing of the well will commence by the end of January 2021. Subject to successful testing, production hook-up is planned to be completed by the end of Q1 of 2021.
Currently, planning for the drilling of well No. 29 at Svyrydivske field is progressing, with the well due to be spudded in Q1 of 2021. At Vasyshchivske field planning is continuing for a new well to explore the Vvdenska (VED) prospect within the Vasyshchivske licence area. At Ostroverkhivske field processing and interpretation of data of 3D-seismic studies have been completed. The results provide the ground for drilling a new well, due to be spudded in 2021 as well.
“Last year turned out to be rather difficult and not only for the industry, but for all of us in general. Due to our numerous safety measures and high professionalism of our team, Smart Energy Group has not experienced any significant impact so far. We continued to increase production volumes and execute our projects. Nevertheless, we have pretty restrained expectations regarding a new year as lower gas prices and the global economic crisis, strengthened with pandemic COVID-19, will have their impact on gas production,” CEO of Smart Energy Group Serhiy Hlazunov said.

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Ukraine in January-September 2020 increased gross natural gas consumption by 3.7% (by 710 million cubic meters) compared to the same period in 2019, to 20.01 billion cubic meters, according to the data of the quarterly monitoring of the National Energy and Utilities Regulatory Commission (NEURC).
According to the calculations of the Interfax-Ukraine agency, in the third quarter of this year, consumption increased by 13.6% (by 520 million cubic meters) compared to July-September 2019, to 4.35 billion cubic meters.
The use of natural gas by household consumers for the nine months of 2020 amounted to 5.31 billion cubic meters, which is 6% less than in the same period last year.
Thus, the share of household consumers in the overall structure of gross consumption for the nine months of 2020 amounted to 26.5% against 29.3% in January-September 2019.
As reported with reference to the NEURC data, Ukraine in 2019 reduced gross natural gas consumption by 6% compared to 2018, to 28.29 billion cubic meters. Consumption of natural gas by household consumers in 2019 decreased by 21.6% compared to 2018, to 8.33 billion cubic meters.



Natural gas supplies to Ukraine grew 11% year-on-year in January-November 2020 to 15.6 billion cubic meters (bcm).
Gas Transmission System Operator of Ukraine (GTSOU) said 10.2 bcm of gas were received from Slovakia, up 12% year-on-year, 3.9 bcm from Hungary, up 10%, and 1.6 bcm, from Poland, up 12%.
Volumes of 3.1 bcm, 2.9 bcm and 1.1 bcm were imported from Slovakia, Hungary and Poland, respectively as virtual reverse flow or backhaul, which became available from the beginning of 2020.
According to GTSOU, 10.1 bcm of the gas imported since the beginning of the year were sent to underground gas storage facilities for storage in the customs warehouse mode, of which 6.1 bcm in the shorthaul mode with a preferential tariff for certain points, and 4 bcm in the border-customs warehouse mode. Active customs warehouse gas withdrawals and transportation to the EU began in November.
In general, 82 traders, 45 of them Ukrainian and 30 foreign, ordered gas transportation from the EU to Ukraine in January-November, and more than 50 customers used the shorthaul and customs warehouse services.



The metallurgical enterprises of Ukraine in January-October this year increased consumption of natural gas by 1% compared to the same period last year, to 1.55 billion cubic meters.
According to the information of the Ukrmetalurgprom association, electricity consumption by metallurgical enterprises during this period amounted to about 9.12 billion kWh (96% compared to January-October 2019).
As reported, Ukrainian metallurgical enterprises in 2019 reduced natural gas consumption by 2% compared to 2018, to 1.8 billion cubic meters. Electricity consumption

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The transit of natural gas from the Russian Federation through Ukraine in January-September 2020 decreased by 38.6% (by 28.3 billion cubic meters) compared to the same period last year – up to 45 billion cubic meters, head of the Operator of the Gas Transmission System of Ukraine (GTSOU) Serhiy Makohon said on his Facebook page.
According to him, the forecast for transit from Russia through the Ukrainian gas transportation system by the end of the year is 55-56 billion cubic meters.

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