Natural gas in Ukraine

Ukraine extracts about 20 billion cubic meters of fossil gas each year, and since 2022 this has almost met demand.

[16] Heavy industry is the largest consumer of natural gas in Ukraine (accounting for 40% of domestic consumption), followed by households (over 30%), and communal heating systems for government buildings and residential properties (20%).

[9][nb 4] Naftogaz stated on 17 December 2013 that only four Ukrainian Oblasts (provinces) made regular payments for natural gas.

[17] Ukraine announced on 26 March 2014 that household natural gas prices would rise by 50% from 1 May 2014 in order to receive an IMF $14–18 billion rescue package.

[18] In the first seven months of 2014, gas consumption in Ukraine fell by 15%;[19] this was amidst the Annexation of Crimea by the Russian Federation and the wider Russo-Ukrainian War.

[26][9][nb 5] On 9 January 2014, Ukrainian Energy and Coal Industry Minister Eduard Stavytsky stated that Ukraine (at that time) will buy only Russian natural gas "because it's currently the most profitable".

[9] Natural gas is Ukraine's biggest import at present and is the main cause of the country's structural trade deficit.

[34][35] During the Russo-Ukrainian War, which started in February 2014 with the Russian military invasion of Crimea, severe tensions extended to the gas sector.

[36] During that winter, Ukrainian monopoly Naftogaz was able to import limited quantities of gas from the EU (reverse flow from Slovakia, Poland, and Hungary) at Central European hub prices, around $250 per thousand cubic meters.

[9] Following Russia's launch of the Nord Stream pipeline, which bypasses Ukraine, gas transit volumes have been steadily decreasing.

[25] Ukraine signed a 50-year production sharing agreement with Royal Dutch Shell on 25 January 2013 involving the Yuzivska shale gas field.

[31] On 13 September 2013, Ukrainian Prime Minister Mykola Azarov stated that the (containing all expenditures) price of shale gas will be $120–130 per 1,000 cubic meters.

[9] Ukraine originally expected commercial shale gas extraction to begin in 2017,[45][nb 7] but Shell pulled out of the Yuzivska project in 2015 as a consequence of the war in the Donbas region,[46] located near the field, a collapse in European natural gas prices,[16] and opposition from local residents.

[42] Similarly, Chevron abandoned the Olesska project in the West of Ukraine due to increased geopolitical risks and a collapse in European natural gas prices.

[47] However as of 2024 the gas grid is thought to be generally secure, in part due to the large amount of spare capacity.