Modern Ukrainian History

Ukrgasvydobuvannya put into operation a cycling process plant in Tymofiyivske gas-condensate field (Poltava Oblast). Cycling process is then considered an advanced technology increasing the gas condensate recovery ratio. The main idea of the cycling process is to inject a part of produced natural gas into the producing reservoir to maintain reservoir pressure.

Ukrtransgaz put into operation the Sofiyivska compressor station (Cherkasy Oblast) on the Urengoy-Pomary-Uzhhorod and Progres gas pipelines. These gas pipelines provide natural gas transmission for internal consumers as well as gas transit to European countries.

Chornomornaftogaz commended operation of Shtormove gas field in the Black Sea. The field is located in the Black Sea offshore in the North Crimean zone of the Karkinitsko-North Crimean trough. Initial production reserves of the deposit were approximately 17 bcm of natural gas and 1.3 mn tons of condensate.

Ukrgasvydobuvannya put into operation a cycling process plant in Kotelevske gas-condensate field (Poltava Oblast).

Ukrtransgaz put into operation the Orlivka compressor station (Odesa Oblast) near the border with Romania on the Ananyiv-Tiraspol-Izmail pipeline. This gas pipeline provides natural gas transmission for domestic consumers as well as gas transit to European countries.

Ukrainian Oil and Gas Academy (UOGA) founded. The academy is a non-profit public organisation uniting leading scientists as well as teams of industry institutes, educational institutions, and enterprises that provide scientific and technical support for the oil and gas industry.

Put into operation the Torzhok-Dolyna gas pipeline increasing volumes of gas transit across Ukraine.
Commenced implementation of a compressor station reconstruction program, as well as a residential meter installation program.

Ukraine became a member of the International Gas Union (the IGU), a professional non-governmental non-profit association uniting more than 100 representative members (companies, organisations, trade unions) from 71 countries of the world that represent 95% of the world’s natural gas production. The Union was founded in 1931 to facilitate the development of the gas industry globally.

Ukrtransgaz put into operation the Tula-Shostka-Kyiv pipeline to provide supplies to Ukraine and natural gas transit from the enormous Yamburzke gas-condensate field in the north Tumenska Oblast in Russia.

Ukrtransgaz commenced implementation of in-line diagnostics of gas pipelines using “smart” pipeline pigs.

Using “smart” pipeline pigs made it possible to diagnose the condition of the pipe metal and detect defects without stopping gas pipeline operations. Timely detection and elimination of such defects helps avoid emergencies on the gas pipelines and thus, improve reliability and ensure sustainable natural gas transmission.

At the Shebelynka Gas Processing Plant (Kharkiv Oblsdt, Ukrgasvydobuvannya), a catalytic reformer plant was put into operation. For the first time in Ukraine, the production of unleaded high-octane gasoline was launched.

The government created National Joint Stock Company “Naftogaz of Ukraine”. The purpose of the newly created company was the effective functioning and sustainable development of the oil and gas industry, as well as strengthening the role of Ukraine as an important contributor to European energy security.

The gas transmission system of Ukraine successfully served as a reliable “energy bridge” on the Eurasian continent: transit of natural gas across Ukraine ramped up to its maximum of 141 bcm.

To provide consumers in the eastern part of the Crimean peninsula with natural gas, the Dzhankoi-Feodosia-Kerch pipeline entered operation.

Ukrtransgaz put into operation the Khust-Satu Mare main gas pipeline to transport up to 4 bcm of natural gas per year to the Romanian market via this route.

Ukrgasvydobuvannya put into operation the Yablunivskyi Gas Processing Plant (Poltava Oblast). The plant’s production capacity per year is 2 bcm of natural gas, 108 kt of liquefied gas, 57 kt of stable gasoline, 160 kt of stable gas condensate.

Chornomornaftogaz discovered the Pivnichno-Kazantypske field in the Azov Sea. This was the first large gas-condensate field discovered in the offshore zone of the Azov Sea. Balance-sheet reserves of the field estimated approximately 20 bcm of natural gas.

Chornomornaftogaz discovered the Skhidno-Kazantypske field in the Azov Sea with natural gas reserves amounting to 10 bcm. Ukrtransnafta provided the maximum volume of oil transit across Ukraine of 56.4 mn tons. The Ukrainian oil transmission system transits oil from Russian and other oil-producing countries to EU countries.

Ukrtransnafta completes construction of the Odesa-Brody oil pipeline. It was planned to use the pipeline for the transit of Caspian oil to the countries of Eastern and Central Europe, bypassing the territory of Russia, with the prospect of continuing the route to the ports of the Baltic Sea. The operational length of the pipeline is 674 km, the project capacity is 14.5 million tons of oil per year.

Chornomornaftogaz discovers the Pivnichno-Bulhanatske gas field in the Azov Sea with 840 mmcm of natural gas reserves.

Ukrtransgaz commissions the Tarutyne compressor station (Odesa Oblast) on the Ananyiv-Tyraspol-Izmayil gas pipeline which transports gas to domestic consumers and transits gas to European countries.

Ukrtransnafta completes construction of the offshore oil terminal Pivdennyi (Odessa Oblast) for receiving and shipping oil for further transportation by Ukrainian oil pipelines. Terminal capacity is 14.5 million tons of oil per year; deadweight of oil tankers is up to 110 mcm; capacity of the tank farm is 200 mcm. 

Ukrgasvydobuvannya discovers the Kobzivske gas condensate field (Kharkiv Oblast) with reserves of 43.4 bcm.

Ukrtransgaz commissions a new shop at the Uzhhorod compressor station on the Ukrainian-Slovak border.  The shop makes it possible to increase the capacity of the Ukrainian gas transmission system for gas transit in the western direction.

Ukrgasvydobuvannya puts into operation the Kobziv gas condensate field, and Chornomornaftogaz put into operation the Skhidno-Kazantypske gas field in the Azov Sea.

Ukrtransgaz has launched a new shop at the Dolyna compressor station (Ivano-Frankivsk Oblast). CS Dolyna operates on seven main and several regional gas pipelines and is one of the hub stations on the transit gas pipelines Kyiv – Western Ukraine, Ivatsevychi – Dolyna, Torzhok – Dolyna and the beginning of two strands of gas pipelines Dolyna – Uzhhorod – State Border.

At the Stavyshche compressor station, the Vodoliy combined cycle gas pumping unit with an efficiency of 43% is put into operation. Vodoliy technology is designed to significantly improve the energy efficiency of gas pumping equipment.

Naftogaz launches a number of projects to develop hydrocarbon resources outside Ukraine in Egypt, the United Arab Emirates, Libya and Russia.

Ukrgasvydobuvannya completes the reconstruction of the Shebelinsky gas processing plant and increases its processing capacity to 1 million tons of raw materials per year.

The Kulychykhinskyi gas condensate field implements cycling process technology to increase gas condensate production.

Chornomornaftogaz increases its resource base to increase natural gas production in the Azov Sea and puts the Pivnichno-Bulhanatske gas field in the Azov Sea into operation.

National Joint Stock Company “Naftogaz of Ukraine” appointed the Main Organisation for Standardisation in the Oil and Gas Sector. An organisational structure is created for the implementation of international and European standards in the domestic oil and gas sector.

Construction of the second stage (Gas Metrology Centre) of the Centre for Metrology of Oil, Petroleum Products, Natural and Liquefied Gas (Boyarka, Kyiv Oblast) completed.

Ukrtransgaz put into operation a compressor shop at Oparske underground gas storage.  The new shop has increased the volume of injection/withdrawal of natural gas. Oparske UGS belongs to the Western storage complex, which was established in the Carpathian region, and ensures reliable gas supply to Ukrainian consumers and gas transit to the EU.

Ukrtransgaz has put into operation the Bobrovnytska compressor station for gas injection and withdrawal at the Chervonopartyzanskyi UGS and to unsure the operation of the Tula–Shostka–Kyiv gas pipeline.

“Gas war” between Ukraine and Russia:  Gazprom cuts off natural gas supplies to Ukraine and at the same time significantly reduces volume of gas transit to EU countries.

For the first time, Ukraine’s GTS starts transporting gas from west to east, meeting the needs of domestic consumers with gas supplies from storage facilities, while maintaining the obligation to transit gas.

The Naftogaz project in Egypt receives an industrial oil inflow of 80 tons (588 barrels) per day.

Naftogaz becomes an associate member of the EU's Gas Industry "Eurogas", a non-governmental non-profit professional association, members of which are companies, organisations, and trade unions of the European gas market. The tasks of the organisation are to promote the development of the European gas market, expand international cooperation in the gas sector, to ensure the interests of European companies in the supply, sale, and storage of natural gas.

The Verkhovna Rada adopted the Law of Ukraine “On the Principles of Natural Gas Market Functioning”, which accelerates the development of a competitive natural gas market in Ukraine and promotes its integration into European and global energy markets.

Ukraine becomes a full member of the European Energy Community.

Ukraine officially completes the process of accession to the treaty establishing the Energy Community of the EU and the countries of South-Eastern Europe after ratification by the Verkhovna Rada of the relevant law.

Naftogaz launches a project for the modernisation of Ukraine's gas transmission system: On July 19, the first joint of the reconstruction of the Urengoy – Pomary – Uzhgorod pipeline, an important part of the gas transit corridor on the Eurasian continent, is welded up.

NJSC Naftogaz of Ukraine Overseas Petroleum Company enters into concession agreements with Egypt and the state oil company Ganoub El Wadi Petroleum Holding Company for exploration, development and operation of oil and gas fields in the Eastern Desert of Egypt.

National Joint Stock Company “Naftogaz of Ukraine” and RWE Supply & Trading GmbH (RWEST, Germany) enters into a General Agreement for Natural Gas Sales and Purchase. This launches natural gas supplies to Ukraine from Poland in November 2012.

A state-of-art jack up floating drilling rig, Petro Godovanets, completes drilling work on the first well at the Odesa gas field in the Black Sea.

Naftogaz and Ferrostal Industrieanlagen GmbH (Germany) sign a Memorandum of Understanding on the modernisation of equipment of the Bar gas compressor station (Vinnytsia Oblast) of the Soyuz main gas pipeline, an important part of the transit potential of the gas transmission system of Ukraine.

Jack up floating drilling rig Nezalezhnist begins its operation in the Black Sea offshore at the Arkhanhelske gas field: on 01 February, it begins drilling its first well.

Compared to 2012, gas production in the Black and Azov Seas shelves increases by a third due to the new wells and equipment.

Naftogaz discovers the Pivdenno-Runovshchynske oil field in the Budyschansko-Chutivska area (Poltava Oblast).

Naftogaz and Ukrtransgaz join the AGSI + European UGS facilities data display system under the standards of the Gas Storage Europe (GSE). Since then, data on gas stocks in the UGS facilities is available to customers both in Ukraine and abroad.

New customers are attracted by such transparency and favourable tariffs: as of the beginning of 2021, a third of the gas stored in the UGS facilities of Ukraine was owned by almost 100 foreign traders from 24 countries.

Ukrtransgaz has entered into an agreement with European TSOs: Eustream a.s. (Slovakia), Gaz-System SA (Poland) and FGSZ (Hungary) on the virtual reverse flow of natural gas from the EU. This enables the Gas TSO of Ukraine to operate concurrently for the transit of Russian gas to Europe, the import of European gas to Ukraine, and the supply of gas to Ukrainian consumers.

Once Crimea is occupied, Gazprom tries to raise the gas price for Ukraine. In response, Naftogaz sends Gazprom proposals to review the gas supply contract and a pre-arbitration note with a proposal to resolve disputes regarding the provisions of natural gas sales and purchase agreement (dated 2009) by means of negotiations.

The Parties did not reach a compromise and Naftogaz files a lawsuit with the the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) claiming a fair and market gas price. Naftogaz also claims to recover from Gazprom the amount overpaid for gas which has been supplied to National Joint Stock Company “Naftogaz of Ukraine” since 2010.

Naftogaz also initiates arbitration proceedings with the SCC to amend the contract entered into with Gazprom on the natural gas transit across Ukraine. This action is made as Ukraine needs to fulfil its obligations as a member of the Energy Community to implement European energy laws including the provisions of the so-called Third Energy Package by 1 January 2015.

Gas production started jointly with the Egyptian General Petroleum Corporation (EGPC) Alam El Shawish East: 16 prospecting, 12 exploration, and 12 production wells were drilled, seven oil and gas fields were explored, and production began at four.

Through the mediation of the European Commission, Naftogaz and Gazprom agreed on the first “winter” gas package: if needed, Naftogaz would order gas from Gazprom under a flexible schedule and without the “take or pay” condition.

Naftogaz initiates arbitration proceedings with the Arbitration Institute of the Stockholm Chamber of Commerce to amend the agreement between Naftogaz and Gazprom on the transit of natural gas across Ukraine and the contract for gas supply to Ukraine.

In autumn, for the first time, Ukraine completely abandons the consumption of Russian gas.

Europe becomes the only source of gas imports to Ukraine: Ukraine does not buy gas from Russia, covering its needs with domestic gas and gas imports from the EU.

The Russian Federation receives an official written notice from Naftogaz on an investment dispute under a bilateral agreement on mutual protection of investments entered into between Russia and Ukraine over Naftogaz's assets in Crimea.

From 01 April, Ukrtransgaz and Eustream, the Slovak TSO, switches the Budince connection point to a two-way mode of operation, making the physical transportation of gas in both directions possible.

The first meeting of the new Supervisory Board of Naftogaz, where the majority of the members were independent directors, takes place.

The Arbitration Institute of the Stockholm Chamber of Commerce rejects Gazprom's claim to apply the take-or-pay principle to the gas supply contract.

Naftogaz Group companies file a lawsuit demanding Russia pay USD 5 billion as reimbursement for losses due to seizure of assets in Crimea.

Naftogaz takes the first step towards unbundling the Gas TSO function, i.e., establishing the Gas TSO of Ukraine branch based on Ukrtransgaz, which gathered all business processes, assets, and experts necessary to ensure natural gas transmission across Ukraine.

Ukraine is among the top twenty gas hubs in Europe according to the rating of the European Federation of Energy Traders (EFET).

The Arbitration Institute of the Stockholm Chamber of Commerce makes a final arbitration award in favour of Naftogaz regarding all disputes on the gas supply contract with PJSC Gazprom: pricing, take-or-pay provision, and invalidation of other provisions that are unreasonable and contradict competition principles.

The Stockholm Arbitration makes a final award in the dispute between Naftogaz and Gazprom: Naftogaz is awarded compensation of USD 4.6 billion. Through offsetting, USD 2 billion was transferred as repayment of the debt for gas to Gazprom. The Russian company tries to challenge the award.

Gazprom refuses to comply with the award, in particular it refuses to supply gas to Naftogaz at European gas hub prices.

Naftogaz initiates the “Coolitdown” initiative: Ukraine voluntarily reduces gas consumption to meet its gas transit commitments from Russia to the EU when Gazprom reduces gas pressure at the entrance to the gas transmission system of Ukraine.

Ukraine is preparing to complete the unbundling of Naftogaz (separation of gas sales and transmission functions) and reforming the gas market in line with EU standards.

Ukraine has signed a 5-year contract for gas transit from Russia to the EU through its territory. Expected revenue is around USD 7 billion. Naftogaz organises the transit of Russian gas across Ukraine and Gazprom is one of many customers for transit services.

On 1 January, Naftogaz is unbundled: gas transmission function becomes a new company, i.e., LLC Gas TSO of Ukraine. Naftogaz continues to run the gas storage business, i.e., Ukrtransgaz performs the functions of the operator of underground gas storage facilities.

From 1 August, the operation of the free gas market for the households begins: every Ukrainian may independently choose and change gas supplier and tariff plans.

Ukrgasvydobuvannya signs production sharing agreements with the government for four sites: Balakliiska, Ivanivska, Buzivska and Berestianska. The company confirms its readiness to invest UAH 3.6 billion in their development over the first five years.

Naftogaz receives licenses for the development of the Yuzivska area and the Black Sea offshore.

In July 2021 Naftogaz Group reversed the negative trend of falling gas production and reached an average daily growth.

Despite the price crisis in the gas market, we managed to keep the situation under control - security of supply and social stability during the 2021/2022 heating season was ensured.

Naftogaz and Gas Transmission System Operator of Ukraine (GTSOU) were involved in certification of the Nord Stream 2 operator. Despite the fact that Nord Stream 2 was completed, the pipeline has never been launched.

Following the 2021 results, Naftogaz Group paid UAH 116 bln. of taxes and fees to the state budget, which is 12.6% more year-on-year. The Company's net profit in 2021 amounted to UAH 12 bln.

Despite russia's full-scale invasion of Ukraine on 24 February 2022, all major operations and business processes of Naftogaz Group continued to work.

In the first six months of war, the Group provided 1/5 of total tax revenues to the state budget of Ukraine. In particular, this enabled the government to finance military and humanitarian needs of the country.

Naftogaz has become even more important supporting force for the country's sustainability.