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Kiev looks internally for more natural gas

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.

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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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