Memorandum signed on setting up JV for coalbed gas production in Ukraine

abarrelfullabarrelfull wrote on 22 Dec 2010 07:21
Tags: cbm deals gas gazprom ukraine

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Today at the Gazprom headquarters Alexey Miller, Chairman of the Company's Management Committee and Evgeny Bakulin, Chairman of the Board of NAK Naftogaz Ukrainy signed a Memorandum on setting up a joint venture (JV) for coalbed methane (CBM) production between Gazprom and NAK Naftogaz Ukrainy.

Pursuant to the document, the parties will address issues of preparing a feasibility study and the foundation documents for the JV defining, inter alia, the size of its charter capital and the procedure for shaping its governing bodies as well as their decision making processes. Moreover, Gazprom and Naftogaz Ukrainy will consider issues of developing the JV financing principles and sources and its prioritized projects list.

The document stipulates that the JV is created on a parity basis for operation in Ukraine. It will deal with:

  • CBM resources exploration, estimation and conversion to commercial reserves categories;
  • Wells drilling and construction, CBM fields pre-development, coalbed gas transmission and utilization;
  • R&D, design and survey activities related to coalbed gas production;
  • Elaboration and execution of sci-tech programs and financial mechanisms for coalbed gas production projects.

“Consolidation of efforts underlies the initiatives aimed at integrating the two companies. The JV will make it possible to apply Gazprom's cutting-edge coalbed gas production technologies in Ukraine as well, and open new horizons for our cooperation – in developing unconventional energy sources this time. I mean not only producing extra gas in Ukraine, which was previously inaccessible, but a somewhat more important thing – enhancing the safety of coal mining through CBM extraction,” said Alexey Miller.

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