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OIL AND GAS
Ukraine could break Russia's iron grip through fracking, presidential candidate says
by Daniel J. Graeber
Kiev, Ukraine (UPI) May 19, 2013


Gazprom making strides on South Stream gas pipeline for Europe
Moscow (UPI) May 19, 2013 - Russian energy company Gazprom said all contracts for the construction of the South Stream gas pipeline's offshore section have been signed.

Gazprom touts South Stream -- which would stretch about 575 miles long offshore and more than 900 miles through the territory of southern European countries -- as an option to ensure European gas supplies are stable.

Ukraine hosts the bulk of Russian gas supplies for Europe, exposing the European energy sector to the risks associated with ongoing disputes between Kiev and the Kremlin.

Gazprom said it's concluded all of the contracts needed to start construction of the onshore section of the pipeline later this year. It's placed orders for more than 150,000 sections of pipeline already.

Henning Voscherau, chairman of the South Stream board of directors, said the pipeline would be beneficial not only to European consumers but to stakeholders as well.

"I am sure that South Stream will also promote cooperation on a larger scale, as the gas pipeline will yield mutual benefit and secure the reliability of energy supply to Bulgaria and Europe as a whole," he said in a statement Friday.

Gazprom said some sections should be open to receive gas by 2016 and the full system should be operational by 2018.

A resolution passed in April by the European Parliament calls on members of the European Union to reconsider the pipeline. EU leaders have said the pipeline would strengthen Russia's grip on the energy sector.

Ukrainian presidential candidate Oleh Liahsko said shale gas could help bring a layer of political and economic independence to a new Ukrainian government.

Liahsko, founder of the minority Radical Party, said the Ukrainian government needs to break the Russian grip on the energy sector for the sake of independence. Shale gas, he said Sunday, offers a good possibility for Ukraine.

"We depended on Russia [for] over 23 years [since] independence -- on gas," he said. "And this dependence is not only economic, but political."

European consumers get about a quarter of their gas needs met by Russia, though most of that supply runs through the Soviet-era transit network in Ukraine. The Kremlin has used energy as a geopolitical tool in its disputes with Ukraine, which has moved closer to Europe since a November uprising.

The Ukrainian government last year said there may be enough natural gas in shale reserves to meet the country's needs without imports.

In October, nearly 70 percent of the members the council in Lviv in western Ukraine approved the preliminary agreement for shale exploration with Chevron.

In January 2013, Royal Dutch Shell signed a $10 billion contract to explore Ukrainian shale and in July, British-based exploration and production company JKX Oil & Gas said it started a multistage hydraulic fracturing operation it said was likely the largest operation of its kind in Europe to date

Ukraine holds presidential elections Sunday.

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