14:16 03.09.2021

Naftogaz plans to implement number of decarbonization projects with U.S. support – MP

3 min read
Naftogaz plans to implement number of decarbonization projects with U.S. support – MP

During the visit of President of Ukraine Volodymyr Zelensky to the United States, the Ukrainian delegation presented a $277 billion Ukraine Transformation Plan, according to which Naftogaz may be responsible for the implementation of most decarbonization projects with the assistance of the United States, it follows from the relevant list of projects released by MP Oleksiy Honcharenko on Telegram on Friday.

A government source confirmed to Interfax-Ukraine that the list had been prepared on the eve of the visit. However, according to the source, some changes could have been made to it already in the United States.

In particular, the Group has planned a project on the use of biomass for production of biogas, biomethane and electricity, which involves construction of a network of biogas plants and biomass thermal power plants. As noted, the United States could provide Ukraine with technology and equipment, as well as provide incentives in the U.S. financial market.

The project is designed until 2030 and requires financing in the amount of $10 billion. Ukraine is ready to allocate, at best, $3 billion for its implementation.

Naftogaz also intends to engage in a project for production of second-generation biofuels, in particular biodiesel, for export to the EU and for domestic consumption. The role of the United States is similar. The project will require $2 billion, of which Ukraine can allocate half on its own.

The project could be completed by the end of the decade. At the same time, with U.S. support, the pilot project will last from one and a half to three years, while the entire program can be completed in seven years instead of 10.

In addition, the Group offered to equip its underground gas storage facilities (UGS) for storing carbon dioxide, including in the event of the start of production of "blue hydrogen" from natural gas. It is expected that U.S. companies could share their experience in capturing, utilizing and storing carbon dioxide.

The document states that the implementation of this project requires $2.2 billion in investments and about eight years. Ukraine alone can cover only one third of the costs. At the same time, the start of the project on its own will depend on the possibility of involving partners and ensuring the possibility of supplying carbon dioxide to achieve the necessary conditions for commercialization.

"Provided the United States is involved, a pilot project to rebuild UGS facilities or inject carbon dioxide into existing wells could be planned to be implemented within five years with further scaling up until 2030," the document said.

In addition, Naftogaz is counting on grant funding for the energy efficiency project from the United States and the involvement of American companies to implement energy efficiency measures in Ukraine. The total project budget is $7 billion, Ukraine is ready to allocate $2.5 billion.

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