Ukraine's current unit product energy consumption is one of the highest in the world. The Ukrainian government has developed an Energy Strategy until 2030 which stipulates an over 50% cut in consumption; however, it has not yielded any tangible results so far.
Ukraine's unit energy consumption per metric ton of steel is three times the OECD average. The country's industry is dominated by heavy engineering companies which consume a lot of energy.
Over 29% of local pipelines are being used beyond their service lives, which results in annual loss of 970 million cubic meters of gas. Analysts estimate the necessary upgrade at no less than $18 billion.
Boosting local gas production is an important goal of the Ukrainian government. Theoretically, the country is capable of pumping up to 30 billion cu m a year (up from the current 20 bcm), but that would require major financial investment and a revision of the domestic pricing policy.
The bulk of natural gas produced in Ukraine is marketed inside the country at a price below its production cost. This prevents producers from investing in business development. To raise foreign investment for this purpose, the country would have to abandon its practice of restricting foreign companies from Black Sea deposit development.