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million cubic meters of gas. The supply agreement is only based on actual consumption, reported epravda.com
Naftogaz plans to nearly double its own gas production to 24 bcm over the next decade, Vitrenko vowed. He said Ukraine’s onshore and offshore production costs range from $100 to $160 per 1,000 cubic meters. Currently, gas sells in the EU for about $1,000 per 1,000 cubic meters. January to September, Ukrgazvydobuvannya, Naftogaz’ production arm, saw its production fall by 5% yoy to 10.2 bcm. Vitrenko said: “Gross gas production is 14 billion cubic meters. We expect to increase this production to 24 billion cubic meters in the next 10 years.”
To draw foreign capital and expertise, Naftogaz signed three memoranda yesterday with foreign companies for exploration partnerships and gas production. They are: Dragon Oil, a company majority owned by Emirates National Oil Company of Dubai; SOCAR, the national oil and gas company of Azerbaijan; and two American companies -- 3 Seas Energy and Helmerich & Payne, the world’s largest drilling company.
JKX announces intention to sell Russian assets. The board of JKX Oil & Gas (JKX LN) has decided to dispose of its 100% interest in Russian operating subsidiary Yuzhgazenergie LLC, the company reported on October 4. JKX is actively seeking a buyer, it added in the release. Sales proceeds from the disposal will be used to finance on-going activities and possible acquisitions in Ukraine. Yuzhgazenergie operates the Koshekhablskoye gas field (five wells) in Adygea, southern Russia. While producing more than half of JKX’ hydrocarbons, its Russian subsidiary contributed less than 25% to the company’s revenue and operating profit. In 1H21, JKX sold natural gas in Russia at $52/tcm (-4% y/y), or a 78% discount to the price at JKX’ Ukrainian assets.
The second energy storage system to be built by DTEK. The energy holding firm plans to build its second energy storage system with a capacity of 50 MW next year, said the Director of Operations, Dmytro Sakharuk. Previously, DTEK had launched an industrial energy storage system which was produced by Honeywell, and had the capacity of 1 MW and a capacity of 2.25 MWh at the site of DTEK Zaporizhia TPP in Energodar.
The issue of coal supply is reaching a critical state in foreign markets, reported DTEK. China is experiencing is seriously a coal shortage due to its trade war with Australia. This has complicated its purchase from Ukraine, said the Operational Director, Dmitry Saharuk. “Chinese industrial companies have set large quotas for the purchase of coal from around the world. In another 3-6 months there will be more demand for it at a very high price due to China's needs," DTEK predicts, adding that the price of coal is $ 260-270 per ton”.
DTEK Oil & Gas natural gas production rose 11% in 9M21 Natural gas production at Ukraine’s largest private producer DTEK Oil & Gas (DTEKOG) rose 11% y/y in 9M21 to about 1.5 bcm (35.9 thsd boepd), according to its press release published on October 12. The company launched on September 12 a newly-drilled Machukhske-58 well (depth 5.36 km) with the output of 300 tcm per day (2.0 thsd boepd), the release said, adding that so far in 2021 DTEK Oil & Gas has completed the drilling of four wells.
72 UKRAINE Country Report November 2021 www.intellinews.com