Ukraine Approves LNG Feasibility Study

Ukrainian Minister for Energy and Coal Industry Yuriy Boiko has approved a feasibility study for a national LNG terminal project, the Worldwide News Ukraine news agency has reported.

The news is a step forward for the major Black Sea terminal, which had previously faced abandonment due to funding constraints.  However, following the approval of the feasibilty study into the construction of the project, the first line of the terminal is expected to be constructed in early 2013, Worldwide News reports, with the terminal to begin operations in 2015.

Separately, Ukrainian news site ForUm reported yesterday that the Cabinet of Ministers had approved the project, a decision Vladislav Kaskiv, head of Ukraine's state investment body, described as historical.

"Today is a historical moment for alternative energy supplies in Ukraine," he said. "The Cabinet has approved the resolution, including all economic figures, schedule chart and organisational model."

"This is a very important decision for Ukraine... The government's income share will be 25 per cent against a 7 per cent investment share. This formula will lay foundations for the realization of other large-scale projects at international standards." 

The approval of the project is another step forward in Ukraine's bid to diversify its gas supply. Locked into negotiations with Russia's Gazprom, Ukraine's main supplier of gas, for lower gas prices, the country has increasingly looked to alternative supply to ensure its energy security.