SECURITY OF NATURAL GAS SUPPLY TO CONSUMERS IN UKRAINE AND POLAND IN THE FACE OF OPEN RUSSIAN MILITARY AGGRESSION IN 2022 (COMPARATIVE STUDY)

Abstract

Security of natural gas supply to consumers in Ukraine and Poland in the face of open Russian military aggression in 2022 (comparative study). Military operations, including Russian attacks on natural gas production sites controlled by Ukraine and network restrictions, have led to a 7 % year- on-year decline in natural gas production and the temporary loss of natural gas access for hundreds of thousands of Ukrainian consumers. In 2022, 18,5 bcm of natural gas is likely to have been produced. The autumn suc- cesses on the frontline allowed Ukraine to start clearing damage on reco- vered territories and increase the number of new drillings. The extensive damage to companies using natural gas in production that was caused by Russian attacks and the scale of emigration reduced natural gas consumption in Ukraine by a quarter. Nevertheless, imports were ne- cessary. It was most profitable for the government in Kyiv to bypass transit costs and buy part of the natural gas supplied from Russia via Ukraine to the EU. Due to the cost of transit, a smaller part of the gas acquired by Ukraine was from other countries (e.g. Norway). The amount of natural gas (owned and owned by foreign companies) in storage in Ukraine at the end of October was 14,2 bcm. In the end, from its western partners Ukraine probably im- ported a total of only 1,5 bcm. Likely, some of the natural gas owned by foreign counterparties stored in Ukrainian storage facilities was purchased. As of 2021, the demand for Polish customers was lower than for Ukrainian needs. According to preliminary data, some 16,15 bcm of natural gas was sent to Polish consumers in 2022. Probably mainly due to the authorities’ protective moves towards households, natural gas transmission to domestic consumers in Poland fell by only less than 17,5 % compared to 2021. Indus- trial use of natural gas has decreased more. The Polish authorities have completed many investments (or made progress in this area) in natural gas infrastructure long postulated by experts. The degree of depletion of deposits and the high capital intensity of natural gas exploration and production requires a significant increase in investment in natural gas exploration and production to stop the further decline in natural gas production in both countries.