Just a day after formally assuming her post as Ukraine’s top diplomatic representative to Canada in June 2022, Ambassador Yuliya Kovaliv was at the Global Energy Show in Calgary, exhorting Canadian energy companies to look to her homeland as an investment mecca for oil, gas and renewables.
Eighteen months later, it’s clear developing ties with Canada’s energy industry remains a top priority for Kovaliv, who sat down recently with Timothy Egan, President and CEO of the Canadian Gas Association, to talk about the potential roles Canadian firms can play in helping Ukraine develop its energy sector.
Even as the war grinds on toward the two-year anniversary of the February 2022 invasion of Ukraine by Russian forces, Kovaliv continues to urge Canadian energy companies and infrastructure equipment suppliers to begin building partnerships now to position themselves for future opportunities.
Kovaliv praised Canada’s support from both public and private sectors in rebuilding power grids damaged by missile attacks last winter, attacks that were part of a strategy to demoralize Ukrainians by depriving them of heat, light and mobile phone connectivity.
“I want to convey our profound gratitude for the many Canadian companies that stepped up and provided the equipment to the Ukrainian infrastructure companies in the energy sector,” Kovaliv said. “The quick and decisive actions by both governments and industry enabled us to expedite infrastructure repairs in a way that was nothing short of miraculous.”
Looking ahead, Ukraine’s vision is to ensure energy security to prevent future adversaries from using energy as a weapon. While joining other developed nations in pursuing emission reduction goals and developing renewable energy, expanding domestic natural gas production and use are also key to achieving energy independence – a long-held national energy policy objective.
Ukraine’s energy ambitions extend far beyond its borders. With one of the world’s most well-developed gas transmission networks capable of supplying 180 bcm of gas per year to the European market, Europe’s second-largest supply of proven gas reserves trailing only Norway, and 33 bcm of underground storage capacity, Ukraine is well-positioned to become a European energy hub, Kovaliv said.
“We have all of the infrastructure already in place, and we have companies that are eager to find partners who can help us develop our huge potential,” Kovaliv noted. “That’s why my message is that now is the right time for Canadian companies to be looking at the Ukrainian energy market.”
Natural gas will continue to play a prominent role as part of Ukraine’s energy mix for decades to come as an abundant, reliable source of fuel for power generation even as Ukraine and its European allies ramp up renewable-energy projects. And as one of the world’s top five exporters of grain, demand for natural gas for fertilizer production will rise as global population growth creates a need for increased food production, Kovaliv said.
Kovaliv emphasizes that Ukraine is seeking partners who can not only provide the drilling know-how and technology to develop her nation’s resources but also bring expertise in carbon capture, utilization and storage (CCUS) and other technologies needed to decarbonize the natural gas sector.
“We want Ukraine’s oil and gas industry to meet the best, world-class standards in terms of reducing emissions,” Kovaliv said. “So this is the best time for Canadian companies to begin exploring cooperative partnerships.”
For Ukraine, achieving energy security and independence is a multifaceted challenge that will involve relying more heavily on its nuclear potential, development of both renewable energy and domestic natural gas reserves, and improving energy efficiency across the economy.
Europe, as well, can achieve greater energy security by using Ukrainian natural gas to diversify its sources of supply, Kovaliv said. The European Union (EU) discovered the painful downside of undue reliance on any single source of energy as it became the target of Russia’s hybrid war strategy leveraging its role as a major supplier of gas to Europe in a bid to weaken allied support for Ukraine.
But that strategy of creating natural gas shortages and high energy prices in Europe failed miserably, spurring unprecedented efforts to replace Russian gas with natural gas from other sources.
Instead of weakening allies’ resolve, Kovaliv said, Russia suffered a major strategic defeat in the loss of Europe as a significant market for its natural oil and gas exports. Kovaliv credits the speedy construction of LNG regasification and storage facilities in EU and redoubled efforts to ramp up renewables for Europe’s success in standing firm against Russia’s attempt at energy blackmail.
Nearly two years into the war European gas traders continue to store natural gas in Ukraine, and Ukraine has continued to transport gas to Europe without major disruption since the war began. Kovaliv points to both facts as important signals that “the energy market showed remarkable resilience during the war and Ukraine continues to be an important EU partner in the energy sector.”
Ukraine discontinued its import of Russian natural gas in 2015 following Russia’s annexation of Crimea. Soon thereafter, the country was fully integrated with the EU’s gas and electricity markets, including conforming its internal regulations to EU standards.
The 2022 invasion reinforced lessons Ukraine had already learned, but Kovaliv said it should serve as a reminder to the entire community of nations of the critical need for diversity in energy supplies to guard against the weaponization of energy as a tool of geopolitical influence.
Kovaliv noted Ukraine’s desire to work more closely with Canada and the Canadian natural gas sector, “I just want to thank the Canadian government, Canadian companies and Canadian citizens for their strong support of Ukraine. Canada was the first to ban Russian oil and gas sending the clear signal to other partners on the importance of fighting back Russian attempts to weaponize energy,” Kovaliv said. “We can all learn lessons from this sad chapter and build on policies that support energy security and independence, understanding that we can’t allow it to happen anywhere in the world, any time in the future.”