Thank you, Mr. Chair.
Good morning, bonjour, dear madams and sirs.
Please let me express my sincere gratitude for the invitation to join you at this panel and the possibility to be an expert witness at the Standing Committee on Natural Resources. I've been in the energy sector for 15 years and 8 years in the gas sector.
The matter of energy security of Ukraine, which primarily relates to the issues of natural gas supply to Ukraine and transit of natural gas through the territory of Ukraine, could be solved only if any and all actions of the Russian Federation aimed at an increase in natural gas price, a reduction in supply volumes of natural gas, or a reduction in transit volumes don't have a significant impact on the Ukrainian economy and the political decision-making process for Ukrainian authorities.
The guiding role of hydrocarbons, first and foremost, the share of natural gas of Russian origin, should be reduced to the greatest possible extent in the energy balance of Ukraine, deploying a wide range of measures.
Ukraine must become an inherent and integral part of the European energy market.
On September 24, 2010, Ukraine acceded to the Energy Community Treaty. In doing so, Ukraine accepted and committed itself to obligations on the staged implementation of the European energy legislation. In a rather short term, Ukraine has to complete this assignment and implement on its territory the European model of energy market operation.
The integration of Ukraine into the European energy market would enable implementation of the projects related to the cross-border flow of energy resources and joint development of transport infrastructure. Even today, we may ascertain that the reverse flow supply of natural gas from the European Union countries to Ukraine can produce a tangible and economically reasonable alternative to Russian gas. Today, Ukraine is in need of support, by any and all political means, of her efforts aimed at stabilizing the reverse flow supply of natural gas as the most time-efficient tool for enhancement of its energy independence.
Let me briefly describe the potential action-oriented aspects from Canada and Canadian industry on the issue of contributing to the energy security of Ukraine by means of participation in a range of comprehensive focus areas.
First is the reduction in natural gas consumption volumes, increase in energy efficiency, and development of alternative energy sources. This area makes possible a significant decrease in energy dependence. At present, the marketing niche of energy efficiency and the alternative energy market in Ukraine can be attractive both for injection of capital and for the transfer of technology.
According to data from IHS CERA, today the energy capacity of the Ukrainian economy is, by a substantial margin, higher in comparison with that of the European Union, which provides the most unique opportunity to invest and to apply creative technology in every sector, including energy and construction. The tremendous potential of Ukraine in biomass creates an opportunity for substitution for natural gas in power and heat generation.
Second is the increase in domestic production of natural gas in Ukraine. In specified areas, mutual cooperation can occur in multiple spheres: investment in the production of natural gas and the operation of Canadian oil and gas companies in Ukraine; the transfer of sophisticated technologies related to the production of unconventional natural gas and the augmentation in production of conventional gas at the fields with the production volume decrease phase; the transfer of sophisticated technologies related to minimization of losses of produced hydrocarbons over the course of extraction and processing.
Ukraine requires innovation technology and it is highly important to find the appropriate partnership models in order to provide the means for Canadian energy, engineering, and service companies to operate in Ukraine.
Third is diversification of the natural gas supply to Ukraine and in general to the European market. Its increase by any possible means other than sources from Russia will automatically enhance the energy security of Europe and Ukraine, in particular.
For this purpose, contribution by the Government of Canada and participation of Canadian companies in multiple initiatives and projects aimed at the saturation of the European natural gas market will automatically cause a positive impact, including for Ukraine.
Fourth is educational programs and further professional training. This focus area of cooperation and endorsement is a key one, because the long-term implementation of the above-mentioned tasks will succeed only under this condition. International education in the energy sector, the possibility of continuing professional development, and the introduction of new technologies will enable the real sector of the economy to be filled with advanced professionals and the implementation of necessary structural reforms in the energy sector of Ukraine.
Canada already provides such kind assistance for Ukraine, which we genuinely appreciate, and many young people of Ukraine study at universities in Canada or intern at Canadian companies.
The indicated cooperation could be extended to the energy sector as well.
Therefore, diversification of the natural gas supply, the increase in energy efficiency, the increase in volumes of natural gas domestic production, alternative energy use, and improvement of the professional educational level are the key areas to be entered into by Canadian investments, Canadian technologies, and Canadian companies.
Thank you for your attention. I am ready to answer your questions.