Ukraine to increase gas production on its own without extending agreement with Russia

Ukraine's state-owned gas producer, importer and distributor Naftogaz has announced an increase in domestic gas production to boost reserves in preparation for the approaching harsh winter, especially as the gas transit agreement with Russia is also set to expire.

Naftogaz said in a statement on September 20 that its subsidiaries produced 9.8 billion cubic meters of commercial natural gas in the January-August period this year, up 7% year-on-year.

The growth is due to the development of 52 new wells across Ukraine, of which 17 are being produced at a rate of 100,000 m3/day, the Eastern European country's energy giant said.

Naftogaz's subsidiaries mainly operate wells that have passed their peak production after decades of exploitation and are in decline. They have also recently begun drilling wells into previously untapped deep formations where "tight gas" accumulates in low-permeability reservoirs.

According to Naftogaz's main production subsidiary UkrGasVydobuvannya, the total remaining recoverable reserves of the country's three largest gas fields – Shebelynske, West Hrestyschenke and Yefremivske – are estimated at 127 billion cubic metres, compared with 1,200 billion cubic metres in the early 1960s.

Naftogaz said 52 new gas wells have been developed across Ukraine, of which 17 are being produced at a rate of 100,000 cubic metres per day. Photo: New Voice of Ukraine

After the government in Kiev banned exports of domestically produced gas from February 2022 as Russia launched a military campaign in Ukraine, Naftogaz stored the increased gas output mainly in vast underground storage facilities.

Ukraine aims to accumulate 13.1 billion cubic meters of gas in storage by November 1, to meet the sudden increase in domestic demand in winter.

While improved storage levels could provide Naftogaz with less of a headache, the expiration of the gas transit agreement is seen as an additional challenge in maintaining stable gas supplies to the country's northern and eastern regions.

Russian gas flows transiting eastern Ukraine have played an important role in supporting local supplies, balancing loads across the country's entire pipeline network.

Ukraine's main Soviet-era pipeline network is designed to transport gas in an east-west direction, moving hundreds of billions of cubic meters of West Siberian gas each year from the Russian border west to Poland, Slovakia, Hungary and Romania, which also have large storage facilities.

Naftogaz has been approached for comment.

Meanwhile, a local Ukrainian media outlet on September 19 retracted an initial report that Ukraine would allow Azerbaijani gas to transit through the country to Europe when its transit contract with Russia ends in January 2025, although Russian gas would still be included.

Citing an unnamed government source, leading news agency Ukrainska Pravda reported that Ukraine has agreed to send Azerbaijani gas to Europe as a temporary measure after the current transit agreement between Russia and Ukraine expires.

That would not stop the flow of Russian gas to Europe, however, as Azerbaijan would have to agree a swap deal with Russian gas giant Gazprom.

"We understand that the European Union needs time to completely abandon Russian gas. We are taking this step to make this transition easier for the EU," the news agency initially quoted the source as saying.

Hours later, Ukrainska Pravda reported to "clarify" that its sources stressed that there is currently no gas transit agreement signed between Ukraine and Azerbaijan, nor are there any relevant negotiations, Reuters reported.

The statement is in sharp contrast to previous statements by President Volodymyr Zelensky and other government officials, who have repeatedly cited the billions of dollars Russia earns from gas exports to help finance its war with Ukraine as a reason for not renewing the gas transit deal.

On the eve of her visit to Kiev, European Commission (EC) President Ursula von der Leyen said on September 18 that Ukraine will decide what it wants to do with Russian gas transit after the contract expires.

EU Energy Commissioner Kadri Simson said last week that European countries still receiving Russian gas via pipelines through Ukraine had had “plenty of time” to prepare for a complete halt in supplies.

Minh Duc (According to Upstream Online)

Source: https://www.nguoiduatin.vn/khong-gia-han-thoa-thuan-voi-nga-ukraine-tu-minh-tang-cuong-san-xuat-khi-dot-204240921094845384.htm