Ukraine appears to be considering presenting itself as an alternative to Russia in exporting energy to Europe and aiming to overtake it as a supplier of natural gas while increasing electricity exports to the European Union.
The head of Ukraine’s largest energy company said it would cost billions of dollars to rebuild the country’s shattered energy infrastructure, but spending that money would help the European Union complete the transition away from Russian energy.
“Ukraine should be rebuilt not out of charity, but out of practical commercial interests,” Oleksiy Chernyshov, CEO of state oil and gas company Naftogaz, told Politico.
The largest reserves of natural gas
He explained that Ukraine has the second or third largest natural gas reserves and resources in Europe.
He also pointed out that “we must achieve self-sufficiency and start supporting the outside world, in particular the European Union, by producing more natural gas in the coming years.”
It is assumed that domestic production can cover the country’s demand this winter, after which exports are possible.
Last year, Ukraine produced 18.5 billion cubic meters. m of gas, and consumption reached 20.1 billion cubic meters. Oriental studies.
“As long as intense fighting continues, one should not expect an increase in gas consumption, especially in the context of Ukraine’s uncertain economic future,” the think tank said in a statement.
Last year, Naftogaz, a subsidiary of Ukrgasdobycha, drilled 47 new wells.
Ukrainian gas instead of Russian!
Despite the war, Russia continues to use Ukraine’s extensive pipeline network to deliver gas to its dwindling customers, mainly to Slovakia and, to a lesser extent, to Moldova.
Under the terms of the transit deal, Ukraine earns $7 billion a year, and the Kremlin is said to be open to renewing it when it expires next year.
Chernyshov also said that the decision to extend the agreement on the transfer of gas remains with those countries that are still dependent on Moscow, but noted that Naftogaz seeks to eventually “replace the gas that now goes from Russia to the EU through Ukraine” with Ukrainian gas .
Relations between Naftogaz and Russia are deteriorating: Last month, a Ukrainian company won a $5 billion arbitration lawsuit against Gazprom’s gas export monopoly for illegally seizing its assets in Crimea.
They also argue about transit fees.
While the country’s proven natural gas reserves are over 1 trillion cubic meters, most of it is in the east, either under Russian control or close to the front lines.
Chernyshov acknowledged that they could be difficult to use, and Kyiv could never fully replace Moscow’s gas exports.
meet the needs of Europe
He said the plan is to provide enough electricity to temporarily meet the EU’s green energy transition needs.
Once the war is over and Ukraine starts to recover, it will likely switch to clean energy sources as part of its EU accession process, freeing up more gas for export.
It is reported that at the beginning of this month, the first biomethane plant in Ukraine was connected to the gas network.
Electricity export
In February, Kyiv signed a memorandum of understanding with the European Union on the export of decarbonized gases, which are seen as an alternative to fossil gas.
Kyiv is also optimistic about delivering electricity to its neighbors, which it started doing again last month after a six-month hiatus caused by Russian attacks on its energy infrastructure.
Prior to the Russian military operation, Ukraine struggled to attract sufficient foreign capital due to concerns about corruption and legal protections.
Since then, the country has made efforts to reduce the power of the oligarchy and root out corruption, but Ukraine remains one of the most corrupt countries in the world, according to Transparency International’s annual Corruption Perceptions Index.
