Russia is getting queasy about Ukraine’s shale plans

Russia – the world’s second biggest producer of dry natural gas – is concerned about Ukraine’s plans to develop shale gas through hydraulic fracturing.

Why? Potential water pollution concerns, Russia’s Natural Resources and Environment Ministry said, according to the Moscow Times.

Russia said on Friday that the gas drilling technology which Ukraine plans on using “could pollute water supplies for Russians living near the border between the two countries,” the Moscow Times wrote.

Deputy Environment Minister Rinat Gizatulin said there are “real concerns about contamination because potential drilling sites may be in close proximity to aquifers,” UPI reported.

Gizatulin has called for a bilateral meeting to address these concerns.

Ukraine is extremely important to Russia’s natural gas market; nearly every Russian pipeline that transports gas to the rest of Europe passes through Ukraine.

Currently, Ukraine’s domestic natural gas production accounts for about 30% of demand. Russia makes up the remainder, according data from the US Energy Information Administration (EIA).

Highly dependent on Russia for its gas supplies, Ukraine has been looking to diversify its sources. In January 2013, Shell decided to explore the country for shale gas. According to the EIA, Ukraine could start exporting shale gas resources to western Europe as early as 2020.

Chevron is also eager to get a piece of the pie. The energy giant signed a $10 billion production-sharing agreement with Ukraine last year.

The deals with Chevron and Shell are expected to help the country achieve self-sufficiency in gas an “even enable [it] to export energy,” President Viktor Yanukovich said when signing the deal with Chevron, as reported by Reuters.

Meanwhile, Russia has its own fracking ambitions. Shell and Gazprom, the country’s fourth largest oil producer, have already started drilling the first appraisal well at the Bazhenov formation in western Siberia, one of the world’s largest gas deposits.