Sample News Story
Fuelling One of the Largest Gas Markets in Europe
28/12/2000
Ukraine’s gas industry is not only about the transit of Russian gas to Europe – the Ukrainian gas market is one of the largest in Europe.
The local transmission and distribution system includes over 152,000-km of pipelines while around 10.5 million households are connected to the natural gas grid and 6 million to the LPG grid. This represents 87% of all households.
There are 42 regional distribution companies supplying gas to end-users. However, gas consumption, like all other fuels, has declined from 119 Bcm in since 1990 to around 78 Bcm/year.
The Ukrainian economy is very gas-intensive. Partly because of subsidised gas prices, the household share of gas in the total gas balance has grown to 40%. Compared with 1991, household and commercial gas demand has grown by 25%.
The Chernobyl nuclear disaster and later coal shortages have put even greater demands on gas-fired power plants. In 1999, power generation consumed 16% of the total gas consumption or 12.1 Bcm. Natural gas accounts for 44% of the primary fuel consumption of Ukrainian thermal power plants or 20% all electricity produced. However, because of the non-payment problems in the sector, gas supplies to power plants have been reduced. In 1990 power generation consumed 34 Bcm.
Similarly, industrial demand has declined dramatically in the last decade, mainly due to the decline in heavy industry and the curtailing of deliveries to non-paying firms. In 1990 industrial demand represented 46% of total gas demand, or 55 Bcm, whereas now it has fallen to just 29%, or 22 Bcm.