Could Ukraine actually reduce its dependence on Russian gas by exploiting its considerable shale gas resources?
With the expertise and deep pockets of international companies like Royal Dutch Shell PLC and Chevron Corp., perhaps it could eventually, but that would be years and many wells from now.
In January, Ukraine signed a production-sharing agreement with Shell for Ukrainian shale gas field Yuzivske, and Chevron obtained the right to develop gas deposits at Oleske field in western Ukraine (OGJ Online, Jan. 25, 2013).
Ukrainian shale resource
The US Energy Information Administration, in an April 2011 report prepared by Advanced Resources International Inc., cited Oil & Gas Journal's estimate that Ukraine has 39 tcf of proved natural gas reserves (OGJ Online, Apr. 6, 2011).
EIA itself estimated that Ukraine, on top of those established reserves, may have 42 tcf of shale gas resources technically recoverable from 197 tcf of risked shale gas in place.
By comparison, EIA estimated technically recoverable shale gas resources of 187 tcf in Poland, which like Ukraine is attempting to exploit its shale gas, and 180 tcf in France, which has banned its exploitation.
EIA said "promising shale gas targets" can be found in "the southeastern extent (from Poland) of the Lublin basin into Ukraine and the Dnieper-Donets basin in Ukraine."
ARI applied play success factors, prospective area success factors, and composite success factors to shales of Visean age in the Dnieper-Donets basin and shales of Silurian-Ordovician age in the Lublin basin.
ARI said geochemical data suggest the dominant shale gas formation in the Dnieper-Donets basin is the "Rudov bed," a Lower Carboniferous (Visean) black shale lying in a 7,134 sq mile prospective area, and that shale gas potential may also exist in Frasnian (Upper Devonian) shale and carbonate packages in more isolated parts of the basin.
ARI estimated the Silurian black shale in the Lublin basin of Ukraine contains a resource concentration of 79 bcf/sq mile over a 7,850 sq mile prospective area.
Shell's PSA covers Yuzivske field in Donets oblast of the Dnieper-Donets basin. Chevron's efforts at Oleske, 40 miles east of L'viv, will be directed at shales in the Lublin basin.
Where Ukraine fits
In its 2011 report to EIA, ARI identified two groups of countries in which it said non-US shale gas development may appear most attractive.
It included Ukraine in a group of countries currently highly dependent on gas imports, have at least some gas production infrastructure, and have estimated shale gas resources that are substantial relative to their current gas consumption.
"For these countries," ARI said, "shale gas development could significantly alter their future gas balance, which may motivate development. Examples of countries in this group include France, Poland, Turkey, Ukraine, South Africa, Morocco, and Chile."
Other EIA observations
In its report for EIA, ARI pointed out that Russia has the world's largest proved gas reserves, estimated at 1,680 tcf in 2009, and is also the world's largest gas exporter.
Of the almost 60 bcfd Russia produced in 2009, it exported 17 bcfd to Europe. Ukraine In 2008 consumed 7.8 bcfd, only 1.9 bcfd of which it produced. Ukraine hopes 2 bcfd from Yuzivske and 1 bcfd from other projects could replace Russian imports, which were 3 bcfd in 2012.
ARI observed, "With its large conventional natural gas resource base, Russia is unlikely to aggressively pursue shale gas reserves, though it likely is well endowed with these as well." ARI did not assess shale gas resources in Russia or the Central Asian countries.
Until gas begins flowing from Ukrainian shales, the price of Russian gas charged to Ukraine, at about the latitude of Sakhalin Island or Winnipeg, Man., can be expected to remain perennially in dispute.
Alan Petzet | Chief Editor Exploration
Alan Petzet is Chief Editor-Exploration of Oil & Gas Journal in Houston. He is editor of the Weekly E&D Newsletter, emailed to OGJ subscribers, and a regular contributor to the OGJ Online subscriber website.
Petzet joined OGJ in 1981 after 13 years in the Tulsa World business-oil department. He was named OGJ Exploration Editor in 1990. A native of Tulsa, he has a BA in journalism from the University of Tulsa.