Ukraine's natural gas consumption slumps due to war

(Reuters) - Ukraine's natural gas consumption is expected to fall below 20 billion cubic meters (bcm) this year from about 27 billion in 2021 before the full-scale war with Russia began, the CEO of the country's biggest oil and gas company Naftogaz said on Friday.

Oleksiy Chernyshov told Reuters he expected Ukrainian gas reserves to exceed 16 bcm at the start of the current heating season, enough to get the country through the upcoming winter. The heating season typically starts in mid- to late-October.

"Overall Ukraine's gas consumption, annual, is below 20 billion cubic meters, it is between 18 to 19 bcm," Chernyshov said in an interview.

Chernyshov showed slides to Reuters detailing how gas consumption was distributed. Residents and municipalities accounted for about 11 bcm, while industry needed about 4 bcm and the rest went to the energy sector.

Ukraine consumed about 27 bcm of gas in 2021, making it one of Europe's biggest users of the fuel before the war. But its economy shrank by about a third last year as industries reduced or halted production due to security risks, disrupted exports and broken supply chains.

Chernyshov saw some early signs of the economy rebounding.

Economy ministry data showed that Ukraine's gross domestic product grew by 2.2% year-on-year in the first seven months of 2023.

Chernyshov stressed that Ukraine would not import gas this year and said Naftogaz had no intention of initiating a new gas transit contract with Russia after the current one expires at the end of 2024, echoing earlier comments by Ukrainian officials.

Russia's gas monopoly Gazprom currently transits about 42 million cubic meters of gas a day through Ukraine.


Chernyshov said other countries held about 2 bcm of gas inside Ukraine, demonstrating "the trust and commitment of international traders".

Those volumes helped bring more income to Naftogaz and maintained high pressure at storage facilities, he added.

Since taking over as Naftogaz CEO in November 2022, Chernyshov has repeatedly said he wants to boost domestic gas production. Naftogaz plans to increase gas production to as much as 14 bcm in 2024 from 13.5 bcm this year.

Ukraine's total gas production, which includes gas produced by private companies, is forecast at about 19.1 bcm this year compared with 18.5 bcm in 2022.

Chernyshov said it was possible to continue to raise gas production in Ukraine but it would require new technologies and significant foreign investment into the sector - something that would come only after the war ended.

He also said that better energy efficiency by residential and municipal consumers could help save up to 30% of gas, freeing up the volumes for potential future exports.

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