21 Dec 2010 15:35

Shell eyes tight gas project in Ukraine

KYIV. Dec 21 (Interfax) - Shell has asked Ukraine to include a potential tight gas deposit in the Donetsk-Dnepr basin on the list of deposits that will be tendered for development under production-sharing agreements.

Shell expects to hear back from the government on January 19, 2011, the head of Shell's representation in Ukraine, Patrick van Daele, told Interfax.

Van Daele did not specify the exact location of the deposit, but said if its reserves are confirmed, Ukraine might double gas production compared with current volumes.

Ukraine's gas production edged up 0.8% to 21.182 billion cubic meters (bcm) in 2009, including 20.238 bcm of natural gas, up 1.3%.

Van Daele also did not say how much the project would cost, saying Shell did not want to disclose that information and give rival bidders a leg up in the tender.

Shell has invested about $10 billion in similar projects in the U.S. over the last six years, he said.

In addition, Shell remains interested in developing Ukraine's Black Sea shelf and in coalbed methane production, although is has not proposed specific projects to the government, he said.