PGNiG to Explore West Ukraine
Polish gas group PGNiG has agreed with ERU Management Services, a subsidiary of US investment firm ERU, on joint gas exploration and production in western Ukraine.
The agreement, announced by PGNiG on December 9, covers operations at a licence area in the Lviv region near the Polish border. The partners plan to drill an exploration well there up to 2,500 metres in depth, and collect geophysical data to decide on locations for additional wells.
The work will begin once approvals and permits have been secured, PGNiG said.
“We have good reasons to believe the region has strong production potential, similar to the Przemysl deposit which is the biggest natural gas deposit in Poland,” PGNiG President Piotr Wozniak said in a statement. “Our experience and know-how gained from operating the field for over 60 years will certainly be of use in Ukraine.”
The Przemysl field is situated in southeastern Poland within the Carpathian oil and gas basin that also extends into western Ukraine. It has been in production since 1971 and flows gas at an annual rate of 0.5bn m3.
PGNiG and been selling gas to ERU for supply in Ukraine since 2016. In August, PGNiG announced it had resold to ERU a batch of US LNG imported at its regasification terminal in Swinoujscie.
“Since we established a business relationship with our Polish partner four years ago, we have noticed a positive shift in the investment climate in Ukraine and we are ready to take advantage of it to jointly invest in and expand upstream operations,” ERU Partner Dale Perry commented. “We consider it the first of the many opportunities the Ukrainian energy sector has to offer in the coming years.”
Ukraine is looking to plough more foreign investment into its gas industry in order to lift production, having held a series of licensing rounds over the past year. Most of the country’s largest gas fields are found in the eastern Dnipro-Donets basin, but there are a number of deposits in production in its west as well.