* Ukraine replaces Russian gas with cheaper imports from
* Plans to tap shale gas and Black Sea shelf deposits
* Hopes to use moves as leverage in talks with Moscow
* Russia is using energy, trade to put pressure on Ukraine
(Adds background on Russia-Ukraine trade)
By Pavel Polityuk and Olzhas Auyezov
KIEV, Aug 19 Ukrainian state energy firm
Naftogaz has reduced Russian gas imports by 30 percent this year
and will cut them further in 2014 by doubling imports from
Europe, Ukraine's Energy Minister Eduard Stavytsky told Reuters
in an interview.
The former Soviet republic has long asked Russia to cut the
price of energy supplies. But with years of talks producing no
tangible results, in late 2012 it started to replace Russian gas
with cheaper fuel purchased on the European spot market.
Although it is years away from potential energy
independence, Kiev hopes diversification will ease Moscow's grip
on its economy and persuade Russia to reconsider its stance -
which has become even tougher this month as Moscow stepped up
customs checks on all Ukrainian goods.
"I think that (imports from Europe) will be 2.0-2.5 billion
cubic metres this year, and in 2014 no less than 5 billion cubic
metres, judging from the plans and bids that I have already
seen," Stavytsky said.
He said the price of gas supplied from Europe by one of
Ukraine's partners, German firm RWE, was expected to
average $385 per thousand cubic metres (tcm) in the September
2012-September 2013 period.
Naftogaz paid more than $400 per tcm for Russian gas in the
Ukraine receives gas from Europe by reversing some of the
pipelines that were originally designed to carry gas from Russia
"Technically, we can facilitate (imports of) 6.5 billion
cubic metres (a year)," Stavytsky said.
In the longer run, Ukraine plans to further reduce its
dependence on Russia by shipping in liquefied natural gas (LNG)
through the Black Sea and developing seashelf and shale gas
Stavytsky said a floating LNG terminal - which Ukraine plans
to rent from U.S. firm Excelerate Energy - would be able to
handle 5 billion cubic metres of gas a year.
He said Kiev saw signs that Turkey, which has threatened to
block LNG shipments through its straits leading into the Black
Sea, was ready to soften its stance.
"It is not us, it is the companies that want to supply us,
they are carrying out negotiations," he said.
In order to tap its own resources, Ukraine this year signed
a production-sharing agreement with Shell to develop
the Yuzivska shale gas field in eastern Ukraine.
Stavytsky said it was close to signing two more deals with
global energy majors. Local councils in western Ukraine are due
this week to review a draft agreement with Chevron on
another shale gas project, the Olesska field.
And talks are progressing with a consortium led by
ExxonMobil and Shell on a deal to develop the Skifska
field on the Black Sea shelf.
"I think it will be signed within two months," Stavytsky
He said that Ukraine was working on another, "very big"
Black Sea shelf project and that by 2020 it hoped to become
self-sufficient in gas.
"We want to produce 8-10 bcm (per year) on the Yuzivska
field and 3-5 bcm on the Olesska," Stavytsky said. "(On the
Skifska field) we expect to produce 10 bcm (annually) in five
MESSAGE TO RUSSIA
If these targets are met, local production could indeed
replace Gazprom supplies to Naftogaz which are planned
at 18 bcm this year.
But Stavytsky said Ukraine still hoped to work out a
compromise solution with Russia for the coming years, using its
new resources as leverage.
"We cannot stop imports from Russia altogether today, even
if we wanted to," he said.
"(But) I think our partners do not fully understand our
commitment to, and our actions aimed at, the diversification (of
Russia this month introduced mandatory checks for all
Ukrainian goods crossing its border which, according to
Ukrainian companies, are disrupting bilateral trade.
While the Kiev government has played down the Russian move
and launched talks to resolve the situation, opposition
politicians in Ukraine have called it a trade war aimed at
stopping Ukraine from signing a free trade deal with the
"Let us be guided by business and economic interests and not
political ones," Stavytsky said. "When politics takes over
business... one can reap momentary profit but lose much more (in
the longer run)."
(Reporting by Pavel Polityuk and Olzhas Auyezov; editing by