19:07 14.03.2024

Quota approach to opening gas exports to not affect its balance – head of specialized association

3 min read

The opening of natural gas exports may be accompanied by certain restrictions that help maintain its balance, says Artem Petrenko, executive director of the Association of Gas Producers of Ukraine.

"If we take some small quota for gas exports, I don't see how this can affect its balance in Ukraine," Petrenko said during the roundtable talk: "Second year of ban on natural gas exports from Ukraine: consequences and prospects," organized by the Energy Committee of the Verkhovna Rada.

He added that the opening of exports will be an incentive to increase production by private companies, which has shown a significant decline in the last two years.

According to the executive director of the Association, in 2021 private companies set a production record of 5 billion cubic meters, but already in 2022 it fell by 700 million cubic meters, and in 2023 by another 600 million cubic meters.

He named the reasons for the drop in production since the beginning of the war as the consequences of military operations and shelling, primarily in Kharkiv and Poltava regions, where the vast majority of gas is produced, a drop in industrial consumption and a ban on exports.

At the same time, he drew attention to the fact that gas consumption by Ukrainian industry has decreased from approximately 8 billion cubic meters in the last pre-war years to 3.4 billion cubic meters based on the results of 2023.

"The issue of export has now intensified because there is no industry that can buy gas in Ukraine. It is important for any company to have demand for its products. And I don't know a single private company that would be against export," he noted.

At the same time, Petrenko drew attention to the insignificant volumes of gas purchases from private companies of NJSC Naftogaz in 2022 - 250 million cubic meters and the intensification of purchases in 2023 - according to his data, 1.1 billion cubic meters.

According to data from the Ukrainian Energy Customs, published during the roundtable talk, from 2018 to 2021 Ukraine exported only 151 million cubic meters of gas, of which the most in 2021 was 147 million cubic meters worth $47 million. The resource was exported by 14 foreign economic activity entities in five countries, most of all in Hungary - 114 million cubic meters.

At the same time, the moderator of the discussion, chairman of the subcommittee on gas, gas transportation industry and gas supply policy of the energy committee, Andriy Zhupanyn, drew attention to the fact that even in the absence of any restrictions, gas export volumes during the four pre-war years were extremely insignificant, therefore, in his opinion, issues of lifting its ban should be considered.