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Ukraine invests in Chinese oil-to-gas tech

08th August 2012

Ukraine eyes Chinese coal-to-gas technology as part of USD 3.6bn energy agreement as it seeks to unravel Russia’s stronghold on its energy supplies

The substitution of expensive imported gas with coal is a strategic issue for the Ukraine as it seeks to lessen its dependence of foreign suppliers

The Ukraine has pledged multi billion dollar investments in Chinese coal gasification technology and expertise as part of plan to diminish its dependence on Russian gas, prime minister Mykola Azarov announced on Tuesday.
"The substitution of expensive imported gas with coal is a strategic issue for us. We are interested in the Chinese technology of coal gasification and coal-water fuel production," Azarov said during a meeting with Li Jiping, vice-president of the China Development Bank.
The countries are also set to discuss new large-scale coal gasification projects during president Viktor Yanukovych's November state visit to China.
Ukraine and China on 16 July signed an agreement with China Development Bank securing a USD 3.656 billion credit line to help the country switch its power plants over to coal from gas.
The deal includes building three coal gasification plants in Ukraine and switching utilities from gas to coal slurry and a coal-water mix.

The announcement follows a series of pacts inked over the past two years. In September 2010, for example, the two countries signed a framework agreement on financial cooperation on seven investment projects.
In June 2011, China's Development Bank allocated USD 85 million to modernise Ukraine's state-owned mine in the eastern region of Lugansk.
Russian gas cost USD 425 per 1,000 cubic meters in the second quarter of 2012, by increasing the use of coal in the county's energy mix.

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