Prospects for Strengthening the Security of Ukraine’s Energy Supply through Development of Unconventional Natural Gas Production

Abstract

The article presents an analysis of the American experience in development of natural shale gas in the US, identifies the causes that led to the shale revolution. Its current state is characterized by achieving the peak production simultaneously with shift in the emphasis from natural shale gas to shale oil. The potential technically extracted gas reserves as well as trends in terms of the growth of conventional natural gas reserves and the development of trade in liquefied natural gas are regarded as global preconditions for enlargement of the shale natural gas output. Natural shale gas can be considered as an alternative project only for liquefied natural gas while, compared to pipeline gas, its production is uncompetitive. The national preconditions for development of the industry of nonconventional natural gas production are determined on the basis of the current trends in Ukraine’s gas market. The main obstacles to the realization of this direction are reduction of the gas needs and liberalization of natural gas trade on the basis of European principles. Economic evaluation of the feasibility of natural shale gas production made it possible to forecast its production cost at the wellhead at different depths and estimate its investment attractiveness in different aggregate states. On the basis of the approbation of the presented methodological approach carried out for the Dnieper-Donets and Carpathian shale basins, it was concluded that the investment attractiveness of the first one is higher, given its reservoir properties and the presence of deposits of nonconventional hydrocarbons in different states of aggregation.

Keywords

• natural shale gas
• potential reserves
• production cost
• investment attractiveness