Gazprom Proposes Black Sea Co-operation to Naftogaz

Gazprom has approached Naftogaz to move forward development of Pallas gas field in the north-eastern part of the Black Sea shelf, which has languished since an initial agreement in January 2010.

According to Ukrainian experts, the Pallas field holds an estimated recoverable reserves of 75 billion cubic meters of natural gas and 490 million metric tons of oil.

Kommersant reports that the impetus for the overture was the acquisition by Ukraine of drilling rigs with capabilities to reach deeper depths that previously attainable.

Ukraine plans to use the new rigs to start drilling at the Odesskoe and Bezimyannoe gas fields, increasing its own gas production.

Chernomorneftegaz, a subsidiary of Naftogaz operating in the Black Sea and Azov Sea, plans to boost its production to 2 billion cubic meters from the 155 million forecasted for 2012.

Ukraine is trying to diversify its supply of natural gas after years of disputes with Russia. Recently, Naftogaz entered into discussions for a gas supply framework agreement with RWE Supply Trading.

Volumes of Russian transit gas deliveries through Ukraine fell 20.2% in the first four months of 2012 as Gazprom switched transit routes to Nord Stream and Belarusian transit pipelines.