Gas for Winter. Reserves Are Minimal, and Those We still Need to Be Able to Protect from Shelling

You can’t change horses in midstream, but the management of the NJSC "Naftogaz of Ukraine" can be easily changed in the middle of the heating season. Indeed, what could be more important than national unity?!

Gas management

We will see whether Oleksii Chernyshov, in his new position as vice-premier, will be able to create something functional from the not yet fully formed idea of ​​a new ministry. At the National Joint Stock Company "Naftogaz of Ukraine", Oleksii Chernyshov was definitely in the position where he should have stayed. After all, he did not screw up the job and leaves the economy, despite the war, in a satisfactory condition. Of course, there were nuances such as the reshuffling of the buffer gas, but within acceptable limits. It is worth noting that gas production by the Naftogaz group of companies even increased during the wartime period, which is really important. The compaction of the well grid at old fields, which gave growth, will naturally leave its consequences later. But now is not the time for this.

Instead of Oleksii Chernyshov, the financial director Roman Chumak will act as the head of the company. The procedure for selecting a new president is planned to be completed in April 2025.

The selection will be competitive, conducted according to European standards and in line with the best world practices. Recruiters will earn money. This looks strange during the war; however, we have long been a country of numerous “acting officers.”

It is worth noting that the departure of Oleksii Chernyshov coincided with a turning point, namely the end of the transit era. The company, once created around the transit flow, is finally losing it. It generated income, which was then divided, invested, converted into supplies of galoshes and televisions, multi-move barter schemes, etc. We were talking about billions of dollars, with the help of which many Ukrainian oligarchs rose and made their careers.

Much has changed since then, but even now a billion dollars from transit is in great demand for the Joint Stock Company "National Joint Stock Company "Naftogaz of Ukraine". Even the battles around the pipeline in the Kursk region, which have been going on since August, could not stop the supplies. It is worth noting that since then, over 5 billion cubic meters have been pumped through the pipeline.

Of course, compared to previous figures, transit has decreased ninefold: from 136 billion cubic meters in 2004 to an expected 15.4 billion this year. There will clearly be no continuation of gas transit, at least in the form of direct participation of the state. It is worth noting that Ukraine has not submitted applications for capacity reservations for 2025, and the Public Joint Stock Company Gazprom considers the termination of Ukrainian transit to be the main option for next year.

Of the fifteen billion cubic meters that can be transported to Europe via Turkey, only a third will be possible. There is no visible pressure from Brussels to continue gas transit. Although the end of transit does not particularly, please the Europeans. In addition, gas prices have sharply jumped up, adding about 50% since the summer. Moreover, judging by the quotes, next year is expected to be challenging. In many ways, the increase in prices is speculative, namely, the share of our transit in European supplies is less than 5%, it is critically important only for countries such as Slovakia and Austria, and there will be no countries in which the population freezes from a lack of gas for heating. But this market loves speculation.

For Ukraine, the termination of gas transit carries a lot of unpleasant consequences. In terms of the current winter (and at least the next couple of winters), the ability to import gas from neighbors will fall sharply. Its main channels now are Slovakia and Hungary. Bratislava, however, guaranteed that it would maintain the technical ability to supply via the pipeline, but there is a small nuance. The Slovaks will not have much gas this winter even for themselves, they argue only among themselves about how difficult the situation will be. In addition, expecting special help from Budapest is overly optimistic for us (and the gas will be Russian), and Bucharest will also need time to restructure and, first of all, provide gas to Moldova.

Therefore, it is hard to believe in the International Monetary Fund (IMF) calculations about Ukraine's possible import of 2-3 billion cubic meters. Our neighbors physically do not have this resource, and the prices, which are approaching $ 500 per thousand cubic meters, do not suit us very much.

Gas storage

So, for the second time in history, we will have to get through the current winter with the help of our own resources. Last year we managed to do this. The gas balance, which fell by about 30% after the invasion, was completely covered by our own production. This year, and most importantly, next year, we are forced to repeat it. After all, a cubic meter of gas in terms of energy capacity is almost 11 kW h of energy for heating cities and generating electricity.

And the neighbors will also participate, some with kind advice, and some with missile and drone attacks. Since the end of March, the Russian Federation has periodically launched missiles at the equipment of Western Ukrainian underground gas storage facilities. They have hit with ballistics and whole series of cruise missiles. They are mainly trying to launch missiles and destroy the Bilche-Volytsko-Uherske underground storage facility for oil, gas or their processed products, which is located on the border in Lviv region. This is the largest underground storage facility for oil, gas or their products in Europe, with a capacity that contains more than half of all Ukrainian reserves. The missiles do not reach the gas itself, at a depth of over a kilometer, but there is a lot of equipment above, hitting which can lead to destructive and disastrous consequences. There were victims. But, despite several months of missile attacks, thanks to the heroism of the workers and the measures taken, the Russian Federation was unable to disrupt the pumping of gas into the underground storage facility. By November, 12.9 billion cubic meters had been accumulated, which should be enough, but in practice the situation will remain difficult since these reserves are barely enough. We have never had so little gas at the entrance to winter.

The level of reserves is important: gas production in Ukraine is stable – 1.5-1.6 billion cubic meters per month, but consumption varies dramatically throughout the year. Two-thirds of consumption occurs in winter, and half of this volume is covered by gas from underground storage facilities. Last winter, 6.7 billion cubic meters were withdrawn from storage for the Ukrainian economy, according to the National Joint Stock Company "Naftogaz of Ukraine". In November of this year – already more than a billion cubic meters.

It is worth noting that 94% of our gas production is located in the east (mainly in the Kharkiv and Poltava regions), but 80% of the gas is stored in the west of the country. Therefore, it is critically important to preserve the integrity of underground storage facilities for oil, gas or products of their processing, as well as transit routes. And although the Russian Federation has not yet managed to destroy our underground storage facilities (but they will try), their shelling has already scared off Western traders, or more precisely, their insurers.

If last year more than 5 billion cubic meters of gas were pumped into underground storage facilities for oil, gas or their processed products in the "customs warehouse" mode, half of which was used in the winter, then by the beginning of the season there was eight times less, namely 370 million cubic meters. And now even half of this amount of gas has been pumped out.

And this is despite the fact that at the beginning of the year, before the massive shelling, the managers of the National Joint Stock Company "Naftogaz of Ukraine" expected to use 4 billion cubic meters. Representatives of Naftogaz of Ukraine even conducted modeling showing that it would be able to ensure the release of this gas in almost any scenario, but the missile strikes turned out to be a stronger argument.

Gas production

In terms of operating modes, February-March will traditionally be the most difficult, when the pressure in underground storage facilities for oil, gas or their processed products is already low, and gas is supplied to the surface worse than usual. Especially considering that there is not much of it there to begin with (13 billion cubic meters is not even 28 billion, as it was in 2020).

The heating season will have to be completed as early as possible. Moreover, a lot of gas is needed per year. Perhaps, we will have to use those 4 billion cubic meters of the semi-legendary buffer "long-term storage gas" for heating (in the reports of the European Union on our underground storage facilities for oil, gas or their processed products, it is never taken into account). We would not like to do this... It will be difficult to restore it, and the operating mode of underground gas storage facilities will change. But it is also worth taking these scenarios into account.

For almost a year, thanks to the actions of our glorious officials, one of the largest gas fields in the Kharkiv region, the PJSC “MC “Ukrnaftoburinnya” company, has not produced gas. Among other things, this is minus 0.3 billion cubic meters – just enough to live on these gas reserves until the plan outlined by the National Joint Stock Company "Naftogaz of Ukraine". It would have been possible to do this somehow, overcoming resistance, gas production would have been resumed. If you think that someone has drawn conclusions, then no. Now they have stopped production at LLC "Smart Energy Ukraine". What happened? Do Muscovites owe someone in Kyiv a reward? Or do they pay in cash?

Gas security

The failure of the so-called air defense coalition is obvious, which was unable to provide even the agreed deliveries of equipment that they promised. It is worth noting that seven Patriot surface-to-air missiles that we managed to get with difficulty (despite the fact that we have a fourfold greater need for such air defense installations) will not be delivered by the end of the year. Our politicians have already agreed to the delivery of the antediluvian medium-range anti-aircraft missile systems "Hawk". The beginning of their development dates back to Stalin, although they have been upgraded many times since then, but the question remains how they will shoot down supersonic missiles, and as for how they will shoot down the Kh-47M2 "Kinzhal" – a Russian aeroballistic missile with the ability to carry a nuclear charge and 3M22 "Zircon" – a Russian hypersonic anti-ship missile, there are no questions – none at all. But it is worth noting that even with their deliveries, everything is complicated.

We are tired of talking about the number of Western fighter aircraft delivered: if our highly respected partners, who account for 50% of the planet's Gross domestic product, try and ensure the delivery of a dozen F-16 multirole fighters during the third military winter... this will triple their number in the Ukrainian Air Force. Poland and the North Atlantic Treaty Organization rejected Ukraine's request to either cover the border area of ​​the city of Stryi (where the Bilche-Volytsko-Uherske underground storage of oil, gas or products of their processing is located) with their MiG-29s, or to transfer them to the Ukrainian Armed Forces, at least on lease. The possibility of at least covering the border area with Western volunteer pilots was discussed. But again, these are red lines. As a result: "We are extremely grateful for the help we have already received, but the need for additional protective measures remains." As a result, our only hope is that our own forces are enough for us, but we have a lot of work to do. The shelter creation program traditionally does not look very successful and promising. It is worth conducting an express assessment of both storage facilities and deposits. There will probably be things that can and should be improved, such as whether the condensate barrel is fenced off, whether everything is cleared of flammable debris.

After all, in our country, the consequences of missile strikes are mainly fires. In Europe, there are shortages of anti-aircraft guns, but maybe the situation with firefighting equipment is better?

Before the war, much was done to reduce the personnel of pumping stations, ideally to zero. This approach is European, but as the war showed; to start extinguishing fires, people are needed directly at the source of the fire. By the time firefighters arrive at an unmanned station, it will already be well burned. In addition, it is worth noting that reliable shelters are also needed for employees, equipment, as well as special suits, bulletproof vests, and supplies of materials. Fortunately, glorious traditions allow us to blame the shortcomings on the previous leaders.

No one but us will ensure the functionality of our gas transportation system, and we will have to do this literally under fire.