Ukraine produced 21 bcm of natural gas in 2018 compared to 20.5 bcm in 2017. Gas production increased year-on-year by 0.5 bcm (2%).

Ukrgazvydobuvannya (UGV)

UGV, a 100%-owned subsidiary of Naftogaz, produced 15.5 bcm of gas (73.8% of Ukraine’s total production). This amount includes gas used for the company’s operating needs.

In 2018, UGV output grew by 250 mcm (1.6%) compared to 2017. Since the beginning of UGV’s transformation in 2015, average annual growth has reached 970 mcm (+6.7%). Over the past two years, the company has managed to increase gas production thanks to optimized field development, increased production drilling, and production enhancement operations including hydraulic fractures, coil tubing, etc.

In the same time, UGV fields are almost 87% exhausted, and the processes of securing new licenses is blocked by regional authorities, hampering further growth in gas production. In 2018, UGV received only one license for exploration and further development compared to four in 2017 and 13 in 2016.

All marketable gas produced by UGV in January-October 2018 was purchased by Naftogaz at a price of UAH 4849/tcm net of VAT. Gas produced in November-December 2018 was purchased at UAH 6115.98/tcm net of VAT. Naftogaz supplies this gas to under public service obligations imposed by the Cabinet of Ministers of Ukraine and based on conditions set out in the government’s resolutions.

In 2018, Shebelynkagazvydobuvannya gas production unit produced 8.7 bcm (1% increase), Poltavagazvydobuvannya gas production unit – 6.1 bcm (-1%), and Lvivgazvydobuvannya – 0.7 bcm (4.8%).

Other producers

Chornomornaftogaz, a 100% subsidiary of Naftogaz, produced 10.3 mcm of gas in 2018, which is 200 tcm less compared to 2017 (10.5 mcm). The company has been developing the Strilkove field in the Azov Sea, which supplies Henichesk town in Kherson region.

In 2018, Ukrnafta maintained its gas production at 1.1 bcm, comparable to 2017 levels.

Private companies increased production by 7.3% from 4.1 bcm in 2017 to 4.4 bcm in 2018.