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Kiev looks internally for more natural gas

June 11, 2012 at 8:43 AM   |   Comments

KIEV, Ukraine, June 11 (UPI) -- It's a national priority for the government of Ukraine to increase energy independence through more natural gas production, a minister said.

Chevron and Royal Dutch Shell last month announced plans to invest at least $370 million in the development of the Yuzivske and Oleske shale fields in Ukraine.

The U.S. Energy Information Administration estimates Ukraine has around 42 trillion cubic feet of shale gas reserves, putting it No. 3 among European countries.

Ukrainian Energy Minister Yuri Boiko said increasing domestic production was of national interest.

"Priority No. 1 is to increase domestic production," he was quoted by the National News Agency of Ukraine as saying.

Ukraine gets the bulk of its natural gas from Russia. At roughly $420 per 1,000 cubic meters, the standard unit-volume for natural gas purchases, Kiev is struggling financially, however.

"Ukraine is constantly working over diversification of gas supply," said Boiko.

National energy company Naftogaz last week paid $648 million to Russian natural gas company Gazprom to settle its May bill at a price 2 percent higher than during the first quarter of the year.

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