Naftogaz sees upgrade of heat and power plants one of top priorities in 2024

MOSCOW. March 21 (Interfax) - Naftogaz Group management and the company's supervisory board discussed the upgrade of combined heat and power plants (CHPPs) as one of the group's top priorities for 2024.

"The heat generation facilities transferred to Naftogaz are in an extremely poor condition. They have not been upgraded for years, and the crisis has also adversely affected their operations. In the current conditions, they cannot operate efficiently and ensure the proper level of reliability. Therefore, we need to find funds to upgrade these facilities," Ukrainian media quoted the group's CEO Alexei Chernyshev as saying in a statement released by Naftogaz on Thursday.

Among the group's top priorities for this year, Naftogaz also highlighted the growth of gas and oil production, an increase in the volume of gas belonging to foreign energy companies in Ukrainian underground gas storage facilities, the development of customer services for household consumers and the protection of facilities amid the crisis.

In particular, the group plans to increase natural gas production by 0.5 bcm by the end of this year and attract around 4 bcm of gas from foreign traders for storage in Ukrainian UGS facilities against 2.5 bcm in 2023.

"Like last year, our top priority remains the growth of production of our own Ukrainian gas and oil. The plan for 2024 is to ramp up the gas production by at least 0.5 bcm. We are accelerating the pace of new wells drilling and are using advanced technologies for both subsoil exploration and direct gas production," Chernyshev said.

The group plans to produce 15 bcm of natural gas in 2024 through UkrGasvyDobuvannya (UGV) and Ukrnafta, Chernyshev was quoted as saying.

UGV produced 13.5 bcm of gas in 2023, Chernyshev said.

For its part, UGV CEO Oleg Tolmachyov said that the company ramped up gas production by around 700 mcm in 2023 year-on-year. In 2022, 12.5 bcm of marketable natural gas was produced.

Ukrnafta increased its output of oil with condensate by 3%, or by 39,900 tonnes, in 2023 year-on-year up to 1,409,900 tonnes, gas by 5.8%, or by 60,4 mcm, year-on-year up to 1,097.4 bcm.

The Ukrainian government decided to transfer six combined heat and power plants from the State Property Fund to Naftogaz Ukraine, namely, the Dneprovskaya CHPP in the town of Kamenskoye, the Nikolayev, Krivoy Rog, Kherson, and Odessa CHPPs, as well as the integral property complex of the state-owned Severodonetsk CHPP in early August 2021. The government later decided to increase Naftogaz's charter capital by 646.248 million hryvnas through an extra share issue via additional contributions of these power plants' stakes in it.