Energy sector

An Expert's View about Energy in Ukraine

Posted on: 26 May 2012

As of 1 January 2011, proved reserves of natural gas in Ukraine amount to 549 BCM, and proved reserves of oil amount to 99 million tons.

Energy sector in Ukraine There are wide-ranging opportunities in Ukraine in terms of oil & gas exploration and extraction, modernisation of the gas transportation system, energy efficiency and power generation from renewables. Market overview As of 1 January 2011, proved reserves of natural gas in Ukraine amount to 549 BCM, and proved reserves of oil amount to 99 million tons. The forecasted gas resources are estimated at 4450 BCM, and oil reserves at 990 million tons (including the gas condensate). The forecasted unconventional gas resources of all types exceed 34 trillion m3, making Ukraine one of the 10 most promising countries. However, the data on proved reserves is currently available only for coal bed methane. Assessment of reserves and identification of promising areas for shale gas and tight gas require large-scale prospecting and geological work, with funding amounting to around USD 1 bn. The Ukrainian gas transportation system (GTS) is the largest in Europe. The length of main gas pipelines totals 39,800 km, along which 74 compressor stations are located with a total capacity of 5.45 GW. The system capacity amounts to 288 BCM/year at input and 178.5 BCM/year at output, including the transit to Western and Central European countries (142 BCM/year). Ukraine has the largest natural gas storage system in Europe. It comprises 13 underground gas storage (UGS) facilities with a total active capacity of 32 BCM and a maximum daily output of 254 million m3. Electricity production from renewable energy sources has been developing dynamically in Ukraine, primarily through the construction of solar and wind power plants. Today, renewable energy generation in Ukraine is stimulated by a “green tariff” (one of the most attractive tools for investors in Europe) to ensure profitability of electricity generation from renewable sources. There are also other stimulating mechanisms, i.e. tax benefits and renewable electricity sales guarantees. Key opportunities ξ Product Sharing Agreement tenders for exploration and extraction of unconventional of off shore gas; ξ Exploration and extraction of the traditional gas; ξ Reconstruction and modernization of the Ukrainian gas transportation system and participation in its administration by setting up a consortium; ξ Energy efficiency projects across different sectors; ξ Alternative energy. Latest export opportunities – Energy Latest export opportunities – Ukraine Getting into the market Ukraine is not an easy market to enter. We would recommend starting with: ξ Market research – similar markets are not the same! Simple market research will point out potential pitfalls as well as open up opportunities. ξ Getting the right local advice: the most complex problems in entering the market may have a simple and affordable solution if you get it right, with good legal, tax and accounting advice. The following legal forms for foreign businesses are available: general partnership; limited partnership; added liability company; limited liability company; and joint stock company. Some industries, including banks and insurance companies, are more heavily regulated and must be established in compliance with specific requirements. A representative office can carry out marketing, promotional and other auxiliary and preparatory functions on behalf of the company. There is no prohibition for a foreign legal entity to have both a representative office and to establish a wholly-owned subsidiary at the same time. The most common legal forms for conducting business activities in Ukraine are joint stock companies (JSC) and limited liability companies (LLC). More about doing business in Ukraine Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. ξ Victoria Burachenko, UKTI, British Embassy Kyiv. Tel: +38 044 490 3674 or email: Contact your local international trade team UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. InterOilGas 13 March 2013 Latest events – Energy Useful links More about OMIS and other UKTI services for exporters
Posted: 26 May 2012

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