Russia's third largest oil firm, TNK-BP (TNBPI.RTS: Quote), plans to start a shale gas exploration project in Ukraine in the first half of this year, TNK-BP's Ukrainian division said on Monday.
In October, TNK-BP and the Ukrainian government signed a memorandum saying the firm would explore shale gas in Ukraine’s eastern Donetsk region.
"We expect that the first stage of the project — surveying and test drilling — will be launched this year," a TNK-BP spokesman said.
One of TNK-BP’s billionaire shareholders, German Khan, told Reuters last year the company planned to plough between $1 billion and $2 billion into the project in the next 25 years.
He also said that TNK-BP was hoping to produce some 5 billion cubic metres of shale gas — natural gas trapped in layered rock, rather than porous reservoirs — in 5 to 7 years.
In November, TNK-BP said it would invest $3.8 billion in its gas business over the next three years as it aimed to more than double production to 30 billion cubic meters (bcm) by 2020.
Ukraine, largely dependent of imports of Russian gas, has said it wants to increase domestic gas production and to find other directions of imports.
Ukraine also plans to open its first liquefied natural gas terminal in the Black Sea region in 2015, with a capacity of 5 billion cubic metres.
Ukraine imports about 60 percent of its domestic gas needs from Russia and has repeatedly said the gas price is too high for Ukrainian goods to compete on world markets.
