Ukraine Increases Its Energy Independence - Ukrainian President

Mar 01, 2013, 16:19 ET from Worldwide News Ukraine

KYIV, Ukraine, March 1, 2013 /PRNewswire/ --

To increase its energy security the country plans to improve its energy efficiency, develop alternative energy sources and diversify energy import, said President of Ukraine Viktor Yanukovych at the press conference dedicated to his three years in office. The inflated price of Russian gas affects the economy of Ukraine and causes the country to lose about USD 6 billion annually, according to the president.  

The Eastern European country made efforts to enhance its energy independence.  In 2012, increase in energy efficiency led to the cut of Ukraine's gas import by 12 billion cubic meters of gas - to 33 billion. Notably, Ukraine decreased gas consumption by plants in its major industrial sector - metallurgy.

Besides cutting gas consumption, Ukraine is actively developing alternative energy sources. It signed up energy giant Shell to explore gas resources in eastern Ukraine, an agreement with Chevron regarding gas deposits development in the west of the country is under way. Negotiations regarding gas extraction from the Black Sea shelf were concluded recently.

Additionally, Ukraine is boosting domestic coal production to substitute expensive gas. In 2012, the Eastern European country upped coal production by 4.8 percent - to 86 million tons. Ukraine needs 100-105 million tons of coal per year, thus the production will be increased further, said President Yanukovych. Namely, in 2013, Ukraine will start building three syngas production sites using Chinese technology.

Significant steps were made in diversification of Ukrainian gas import. Ukraine began importing gas under a newly signed deal with German energy company RWE. The 2012 agreement stipulates the provision of 5 billion cubic meters of gas per year. Ukraine is currently buying gas at spot markets, bargaining a somewhat cheaper price than that for Russian gas.

President Yanukovych voiced plans to build an LNG terminal in the Mediterranean Sea, which could provide gas supply of up to 7-10 billion cubic meters per year. He stated that Ukraine was looking into participation in any gas pipeline construction plans around to diversify its gas import. He mentioned that Ukraine's involvement in the trans-Caspian pipeline could lead to gas supplies from Azeri gas field Shah Deniz to Ukraine's gas storage facilities.

SOURCE Worldwide News Ukraine