Ukraine to Sign Shale Agreement with Chevron

Ukraine moves closer to the shale gas production-sharing agreement (PSA) with US energy company Chevron after the second regional council approved the document proposed by the central government.

Lviv region gave the green light to the draft on Thursday, following the vote by Ivano-Frankivsk last month. 

The agreement will be inked soon, giving Chevron the right to explore the Olesska shale gas deposit in the west of the country. A recent analysis by EIA reports that Ukraine has the fourth largest shale gas reserves in Europe.

According to the estimates, Russia is the European country with the largest shale gas (285 tcf), followed by Poland with 148 tcf, France with 137 tcf and Ukraine with 128 tcf.

Ukraine opened the doors to shale explorations last month. It signed a contract with Royal Dutch Shell, allowing the Netherland's energy company to explore the Yuviska block. Gas extraction activities are scheduled to start in 2015.

Italy’s Eni expects to start exploration in the Volyn region between June and August 2014. 

Ukraine's government is keen to produce locally to ease dependence on Russia. Ukraine also continues to make ambitious plans to decrease national energy consumption, switch its power stations from natural gas to coal, build an LNG terminal, and open reverse flows of gas from Europe.

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