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Ukraine hopes shale gas deal will cut its energy costs

Ukraine hopes shale gas deal will cut its energy costs
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Ukraine has signed a shale gas production-sharing agreement with US firm Chevron.

It is another step in Kiev’s drive for more energy independence from Russia – with the President Viktor Yanukovich saying Ukraine could be self sufficient in gas by 2020.

It follows a similar agreement with Royal Dutch Shell in January

Currently Ukraine pays high prices for natural gas imported from Russia. Through shale, offshore and liquefied natural gas development, it aims to ease its dependence on that.

The Olesska field in western Ukraine covers over 5,000 kilometres.

Getting shale gas out will not be a swift or cheap process.

Chevron will spend 300 million euros over the next two to three years exploring to check the reserves and their accessibility.

Total investments, including extraction after exploratory drilling, are put at around $10 billion (7.42 million euros).

There are no guarantees: hopes for shale reserves in neighbouring Poland have been very sharply downsized and Chevron pulled out of a shale exploration tender in Lithuania.