Ukraine bolsters energy security for next winter with closer US business ties
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After emerging from the harshest winter of the full-scale war, Ukraine’s battered energy sector will get help from U.S. companies as Kyiv rapidly prepares for the next heating season, Ukraine’s Energy Ministry announced on March 25 amid a Ukrainian delegation visit to the U.S.
During a roundtable discussion in Houston, Energy Minister Denys Shmyhal appealed to partners for critical foreign investment to cover the huge reconstruction bill in the energy sector — $91 billion over the next decade, according to the latest World Bank count.
Russia’s bombing campaign over fall and winter damaged nine gigawatts of generation capacity leaving millions of Ukrainians without heating and power amid a dire humanitarian crisis. Power plants and substations were torn apart by Russian drones and missiles.
After concern Ukraine wouldn't be prepared for next winter, Kyiv is looking for support abroad and implementing projects at home to boost energy security before the temperatures drop again.
"Together, we will build a new energy architecture in Ukraine that is resistant to challenges and threats," Shmyhal said in the press release.
To help attract investments, the Energy Ministry signed an agreement with Denver-based investment firm Aspect Holdings for hydrocarbons distribution. The agreement will help Ukraine develop its hydrocarbon production, which includes fossil fuels like oil and natural gas, the ministry said.
Ukraine’s state-run oil and gas giant, Naftogaz, also signed several memorandums during the visit to boost its recovery. The company was one of the hardest hit during Russia’s campaign, with over 50% of Ukraine’s oil production taken offline last October.
One of the memorandums is with Solar Turbines, a gas turbine maker, to explore repairing equipment locally in Ukraine rather than sending it abroad — a time consuming and costly process. Under the agreement, Solar Turbines could help train Ukrainian engineers to repair the equipment.
Naftogaz will also align itself more closely with American oil and gas industry standards, after signing an agreement with the American Petroleum Institute (API) — an association of 600 American oil and gas firms.
While the warm spring weather has eased the energy crisis, Ukraine’s energy companies have stressed that preparation work like buying equipment and securing funding needs to begin now in time for the next winter.
Producing certain equipment can take as long as a year, while Ukraine’s domestic energy equipment production is hindered by a depleted workforce.
Last week, Kyiv allocated Hr 13 billion ($291 million) for winter preparations including for shields around critical infrastructure against Russian drone attacks. A lot of energy equipment, like transformers, was left unprotected by the end of last summer, prompting criticism from energy experts.
"Our priorities are protecting energy infrastructure, developing distributed generation, providing additional power sources for heating and water supply facilities, and decentralizing heat supply," Prime Minister Yuliia Svyrydenko said.
