Article content continued

President Viktor Yanukovich is to meet Shell Chief Executive Peter Voser in Davos with new Fuel Minister Eduard Stavitsky set to sign the agreement in Davos on Thursday evening, officials in Kiev said.

Ukraine chose Shell last May as a partner to develop the Yuzivska field in the east of the country and regional councils there approved the production-sharing deal last week, removing the last hurdle to signature.

Ukraine is said to have Europe’s third-largest shale gas reserves at 42 trillion cubic feet (1.2 trillion cubic metres), according to the U.S. Energy Information Administration.

Poland too is looking to tap shale to reduce its Russian gas imports, though a massive downward revision in its estimated reserves and a decision by U.S. major ExxonMobil to halt exploration have dashed initial hopes for Europe’s most ambitious shale exponent.

Production in Ukraine is several years off and will be dependent on results from 15 test wells.

But the Yuzivska shale gas field could be producing 20 billion cubic metres of gas in 2018, Stavitsky said on Thursday.

“We can only forecast at the moment. According to Shell’s optimistic scenario about 20 billion cubic metres could be extracted annually, according to the pessimistic, one at the very least 7-8 billion,” Stavitsky, quoted by Interfax, said in Davos.

If the top forecast were fulfilled, “this will completely solve the problem of the (gas) shortfall in Ukraine,” he said, referring to the amount of gas Ukraine has to import from Russia to meet its domestic requirements.