February 3, 2016

Naftogaz of Ukraine Confirms...

Bohdan Sokolovskyi

According to “Naftogaz Ukrainy”, in 2015 our state consumed 31 billion cubic meters of natural gas. Obviously, we mean the annual consumption by Ukraine, excluding the temporarily occupied areas of the Donbas and Crimea.

This fact, without doubt, should be seen as Ukraine's success. Because there was a time when we imported 50 billion cubic meters of gas at our own gas production of 21 billion. This is due to the so-called “small reverse”, without using “big reverse". Unfortunately, such a reduction in gas consumption to a large extent was due to the transition to other fuels and a decline in production, not only due to increasing efficiency of the final gas appliances. Let's hope that this problem will soon be solved. The trend observed in recent years, is clearly positive.

Based on this logic, one should understand that in the territory controlled by Kyiv, we produce about 18 billion cubic meters of natural gas thus importing up to 13 billion a year. Here it should be recalled that in the autumn an agreement was reached on technical possibility of importing gas from Europe, by current reverse schemes, up to 14.5 billion cubic meters of gas a year — with its daily delivery to Ukraine — only 40 million cubic meters. That is, within a year, it is possible to provide all the necessary imports. In other words, in case of a warm winter, our state can completely stop importing Russian gas. However, in case of a sharp cold snap, when during a day, gas consumption increases and exceeds the total volume of domestic production with imported from the West, and with the current volume of “lifting” from the underground gas storage (UGS), then, unfortunately, technically it is so far impossible to ensure such a daily volume without gas from Russia.

All this shows that in the nearest future in the gas sector Ukraine, apart from a real reduction in consumption, should address three main tasks: to contract non-Russian gas in Europe; to ensure the technical possibility of increasing the volume of the daily “lifting” of gas from underground storage facilities to provide gas is the coldest possible weather; to ensure the supply of gas through Poland with the possibility of optimal daily intake (Poland has already provided getting liquefied natural gas and declared the construction of a gas pipeline from Norway, having thus prepared a good foundation for us). All of this can be completed within 3 to 4 years.

In this way it would be possible to implement the idea of full diversification of gas to Ukraine. Only then, in any weather, one can safely abandon any foreign supplier. And mutually beneficial cooperation will Russia in gas sector will be possible only when it stops its aggression against us. Then it would be possible to consider the possibility of compensation by Russian natural gas of our losses caused by Russia.