In 2017, Ukraine produced 20.5 bcm of gas against 20.1 bcm in 2016. Gas production increased by 0.45 bcm (+2%) compared with 2016.

Ukrgazvydobuvannya (UGV)

UGV, a 100%-owned subsidiary of Naftogaz, produced 15.3 bcm of gas (74.3% of Ukraine’s total). This amount includes gas used for the company’s operational needs.

In 2017, UGV’s output grew by 0.64 bcm (4.2%) compared to 2016. Over the past two years, the company managed to increase gas production thanks to optimized field development, increased production drilling and production enhancement operations including hydraulic fractures, coil tubing, etc. Meanwhile, delays in extending and granting licenses by the State Geology and Mineral Resources Service of Ukraine, the blocking of licensing processes by regional councils, and the overregulated land allocation procedure have all hampered higher growth of gas output.

All marketable gas produced by UGV in 2017 was purchased by Naftogaz at a price of UAH 4849/tcm and sold at UAH 4942/tcm to cover household demand. Prices, conditions and supply procedures are set out in the regulations of the Cabinet of Ministers of Ukraine. Because of the existing regulatory regime, Naftogaz does not supply to households directly but to designated private intermediaries who supply the gas to the households.

Other producers

Chornomornaftogaz, a 100% subsidiary of Naftogaz, accounted for 10.5 mcm of gas in 2017, which is comparable to 2016 (10.4 mcm). The company has been developing Strilkove field, which supplies Henichesk town in Kherson region.

In 2017, Ukrnafta, 51% owned by Naftogaz, decreased its gas production by 17% from 1.3 bcm to 1.1 bcm primarily because the extension of its licenses was blocked for several months by the State Geology and Natural Resources Service of Ukraine.

Private companies produced 4.1 bcm of gas in 2017, which is almost equal to the 2016 output (4.2 bcm).