Ukraine Moves Closer to Second Shale Gas Deal
KIEV, Oct 3 (Reuters) - A second regional council in Ukraine on Thursday approved a government draft for a $10 billion shale gas production-sharing agreement with U.S. energy major Chevron , clearing the way for it to be signed.
Deputies in Lviv region voted by 66-to-3 in favour of the draft, which calls for shale exploration in the Olesska field in the west of the country.
A council in the neighbouring Ivano-Frankivsk region, whose approval was also necessary, backed the deal last month.
"Now we will submit the documents to the Cabinet of Ministers and then there will be the signature," Energy and Fuel Minister Eduard Stavytsky said by telephone from Lviv.
The Olesska deal with Chevron will be the second shale agreement in Ukraine, following one signed earlier this year with Royal Dutch Shell for exploration in Yuzivska in the east.
Shale exploration forms part of plans by Ukraine to diversify its energy sources and ease its dependence on costly natural gas imports from Russia.
Speaking to the council, Stavytsky said on Thursday that Chevron would spend several years and $350 million to assess reserves at Olesska which covers 5,260 square kilometres.
Total investments including extraction after exploratory drilling could reach $10 billion, he said.
Deputies in both regions had expressed concern over the ecological consequences of the "fracking" process, in which water and chemicals are used to break up rock, sandstone and shale deposits to release gas.
Stavytsky says the two shale gas projects could provide Ukraine with an additional 11 to 16 billion cubic metres (bcm) of gas in five years' time.
Gas production in Ukraine totals about 20 bcm, while the country of 46 million people consumes around 50 bcm every year. Ukraine imports gas from Russia at about $400 per 1,000 cubic metres.
Ukraine has repeatedly said it wants to diversify energy imports and cut supply from Russia having failed to reach a compromise with Moscow on pricing.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Operates 28 Offshore Rigs
- Shell Looks Beyond Road Fuels to Secure Future of Refining (Nov 06)
- API Panel Member: Voluntary Methane Program Forthcoming (Oct 06)
- Eni Bets Big on Zohr Explorer Finding New Treasure (Oct 06)
Company: Chevron Corporation more info
- Buying Texas Oil at New Mexico Prices: Majors Go West for Shale (Nov 14)
- Japan's JERA Imports First LNG Cargo Shipped From Chevron's Wheatstone Site (Nov 13)
- Chevron Canada Okays Duvernay Development (Nov 07)