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Gas reserves: hopes for domestic production and a warm winter

The government reports on gas injection into storage facilities. Industry experts recommend speeding up the process. But is the country really ready for winter?

How much gas does Ukraine need?

Gas consumption figures have changed significantly since the start of the full-scale invasion - the country needs much less fuel. There are several reasons for this: some territories are occupied, cities and industry in the war zone have been destroyed, and millions of Ukrainians have left. Energy Minister Herman Galushchenko has reported: Ukraine is ahead of schedule in pumping fuel into underground storage facilities for the winter. The state has already stored more than 14bn cu. m. and the process continues. "This gives us assurance that all the necessary amount of gas will be pumped into the storage facilities by the heating season," Galushchenko said.

The part of underground gas storage facility
Photo: Ukrtransgaz
The part of underground gas storage facility

However, 10% of the current reserves do not belong to Ukraine. "About 1.3bn cu. m. is gas that does not belong to Ukrainian residents. It is temporarily stored there and will later be brought to the European Union," said Volodymyr Omelchenko, director of energy programs at the Razumkov Center.

One more part of the gas belongs to private gas producers. However, the situation there is easier: they have pumped their fuel into storage facilities, but they can only sell it on the domestic market - last year the government banned private producers from selling their gas abroad. The Cabinet of Ministers says that this is a matter of national security, so the ban will remain in effect during martial law.

There are also 700mn cu. m. of contentious gas in Ukraine's underground storage facilities, according to the Razumkov Center. It’s risky to rely on it during the heating season. "This is the so-called "buffer" gas. It passes through all kinds of documents, it is not known whether it is nominal or real. That is, it is a rather dubious gas," noted Volodymyr Omelchenko.

According to the government's plan, Ukraine should enter the heating season with 14.7bn cu. m. of gas in underground storage facilities.

"Taking into account the risks of power generation, the Cabinet of Ministers set a plan of 14.7bn. Our calculations were slightly less," Naftogaz CEO Oleksiy Chernyshov told Ukrayinska Pravda, adding: "The amount owned by Naftogaz is absolutely enough to get through the heating season. We do not plan to touch any other gas."

Ukraine's underground gas storage facilities

Photo: Ukrtransgaz

Ukraine's underground natural gas storage (UGS) facilities are the largest in Europe and the third largest in the world. The total active capacity of underground gas storage facilities is 31bn cu. m. The relative density of Ukrainian UGS facilities in Europe is 22%.

UGS facilities were built on the basis of depleted gas and gas condensate fields. They are located at a depth of 400 to 2000 meters.

UGS facilities consist of an artificial or natural cavity in which gas is stored and engineering structures: wells, gas compression and conditioning facilities, gas gathering and distribution networks, power supply, automation and communication facilities.

Natural gas stored in UGS facilities is divided into active and buffer gas. Active gas can be used for the needs of the economy, while buffer gas is constantly in storage to maintain pressure.

There are four UGS facilities in Ukraine.

The Western Complex was created in the Carpathian region and consists of 5 gas storage facilities: Bilche-Volytsko-Uherske (17.05 billion cubic meters), Bohorodchany (2.3 billion cubic meters), Dashavske (2.15 billion cubic meters), Oparske (1.92 billion cubic meters), and Uherske (1.9 billion cubic meters).

The central complex consists of Chervonopartyzanske (1.5 bcm), Solokhivske (1.3 bcm), Kegychivske (0.7 bcm) and Olyshivske (0.31 bcm) storage facilities. It is designed to ensure the reliability of gas supply to consumers in Kyiv city, Kharkiv, Poltava, Kyiv and Chernihiv regions.

The Eastern Complex, consisting of Krasnopopivske (0.42 bcm) and Vergunske (0.4 bcm, located in the temporarily occupied territory) gas storage facilities, was created within the Donetsk gas pipeline ring and is designed to ensure the reliability of gas supply to Donbas consumers.

The southern complex was formed in the Prydniprovia region in the southern gas pipeline system and consists of two underground gas storage facilities: Proletarske (1 bcm) and Hlibivske (located in the temporarily occupied Crimea).

Where do we get gas from?

The Razumkov Center estimates that Ukraine produces approximately 18 billion cubic meters of gas per year. The government does not publicly disclose exact production figures, as this data was hidden during the war. "Every year the state imports less and less gas. Last year, imports amounted to 1.5 billion cubic meters, this year they are very low," said Artem Petrenko, executive director of the Association of Gas Producers of Ukraine.

Naftogaz wants to stop importing gas altogether. This year, at least. "Despite the war, Naftogaz has managed to maintain gas production today. Moreover, this year we plan to increase it - plus 8% compared to last year," said Oleksiy Chernyshov, Chairman of Naftogaz.

In the above-mentioned interview with Ukrainska Pravda, the Naftogaz CEO noted: "We have an EBRD credit line of 300mn euros, which we plan to use for creating reserves for the energy sector. But now we are not looking at imports. So far, I don't see that we will need it. We are going at the rate of injection, which is 500 million cubic meters ahead of the figure for this day in 2022."

Stopping Russian transit: are there any risks?

The transit contract with Russia is valid until the end of 2024. The Kremlin periodically threatens to shut down the pipeline ahead of schedule. The government makes no secret of the fact that Ukraine is not going to negotiate with the Russians. Thus, the extension of the transit agreement in 2025 is out of the question. The Ukrainian gas transportation system is ready to stop Russian transit, the Energy Minister is convinced. The European Union countries should not have any problems either, as they still have time to prepare for life without Russian natural gas.

Photo: Ukrtransgaz

At the same time, Herman Halushchenko added that the Kremlin could cut off the pipeline at any time: "We are dealing with the Russians - they can terminate this contract any day. It is absolutely clear that this is not related to legal formalities."

If Russia cuts off the pipe, Ukrainians will have gas, the Gas Transmission System Operator of Ukraine assures. The company said: "If the Russian side stops transit, the gas transportation system will be reoriented to meet the priority needs of Ukrainians. The company's managers regularly practice action plans under various conditions, including several modes of gas transportation in case of transit interruption. The company's specialists have experience in operating the system in reverse mode - from west to east."

Problems can only arise if severe frosts continue in March. "But it has to be a really cold winter in March. At last resort, we will have something like we had in 2018," said Andrian Prokip, an expert of the Energy Program at the Ukrainian Institute for the Future. In the spring of 2018, after Naftogaz won the Stockholm arbitration, Russia cut gas supplies by 20%, and Ukraine responded by launching a nationwide campaign called "Screw it Up." The drop in transit came at a time when the storage facilities were almost empty after the frost. At that time, Ukrainians saved 25 million cubic meters of gas per day by reducing the temperature in their homes by only 1 degree.

The lack of coal will have to be compensated with gas

The State Property Fund has reported that this year, Trypillya and Zmiyiv TPPs will operate in a mixed format - using coal, gas and fuel oil. This is how the government decided to emphasise that the situation at the state-owned thermal power plants is normal. However, instead of reassuring, this information is alarming. The answer is simple: the government failed to stockpile coal. Centrenergo, the company that operates the above-mentioned TPPs, failed to prepare for the heating season. For this, the management of the state-owned company was fired.

Photo: EPA/UPG

The new CEO of Centrenergo, Andriy Churkin, promised to fulfill the state plan to stockpile coal by October.

Centrenergo is strategically important for the state. It owns three thermal power plants: Zmiyivska, Trypilska, and Vuhlehirska (now occupied). Previously, almost every tenth kilowatt of electricity in Ukraine was generated by these TPPs.

"Now these coal-fired power plants burn very expensive gas. That is, the gas that we have accumulated in underground storage facilities for the winter. And there is a fine line. For example, one thermal power plant provides electricity to three regions. How much gas is burned there? Because this has never happened before. This is the first time experience. When gas is burned instead of coal," said Stanislav Ignatiev, Chairman of the Board of the Renewable Energy Association.

Where is the situation the most difficult?

The frontline regions are at high risk for the next heating season. The shelling continues, the damage is increasing, and it is life-threatening to repair the networks under fire.

The liberated territories also face problems. For instance, about 12,000 people in the Vovchansk community in Kharkiv Region be without gas this winter.

Photo: Oleh Synyehubov

"We understand that there will be no gas in that region, so we are now preparing to purchase fuel wood. Last winter, we provided households with stoves, generators, firewood and other necessary things to help them survive the winter. We also distributed blankets and food," said Serhiy Lobodenko, head of the Chuguiv District Military Administration.

Kharkiv Region, as well as Donetsk, Zaporizhzhya, Mykolayiv and Kherson regions are the regions where it is impossible to supply gas to all consumers before the frost. And not only because of the shelling. At least when it comes to the private sector.

"Shrapnel hit the networks that homeowners pulled to their homes. This problem is the sole responsibility of the owners of private buildings. And there is a difficulty here. Because many people lost their jobs. Many have left. All these networks at the community level are transit networks. And if one homeowner does not restore his network, all other consumers will not have a stable gas supply," says Stanislav Ignatiev, Chairman of the Board of the Renewable Energy Association.

Tariffs will not change, there will be no gas blackout.

The authorities do not plan to lift the moratorium on raising utility bills. The figures will remain unchanged until the end of martial law, the government promises.

Although Russia is definitely preparing for massive shelling of the Ukrainian energy sector in autumn, the energy experts interviewed are unanimous that the enemy will not completely disable the Ukrainian gas transportation system. That is, the possibility of a conditional gas blackout on a national scale is almost equal to zero. That is why the main target for the Russians is likely to be the power grid. The enemy wants Ukraine to plunge into darkness. That is why every Ukrainian should have a "plan B". There is still time to prepare. 

Serhiy BarbuSerhiy Barbu, Correspondent of “Channel 5”
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