Diversification of energy supplies and the reduction of dependence on Russian oil and gas resources is one of the priorities emphasized by Ukraine's Cabinet of Ministers, the Information-Analytical Bulletin of the Cabinet of Ministers of Ukraine informs.

The topic was discussed at a meeting between Deputy Prime Minister Yuriy Boyko and Carlos Pascual, Special Envoy and Coordinator of the US Department of State for International Energy Affairs at a meeting held in Washington on Oct. 28. The parties, in particular, reviewed the possibilities to arrange supply of liquefied natural gas through a terminal that Ukraine plans to build on the Black Sea coast.

During his visit to the United States, Boyko also held talks with Daniel Poneman, Deputy Secretary of Energy. They discussed a wide range of topical issues of cooperation in the fuel and energy sector, promising investment and technological directions where Ukrainian and American companies can develop mutually beneficial partnerships.

Government experts say after the signing of gas contracts with Russia in January 2009, which caused a sharp increase in gas prices, Ukraine faced an important task to ensure alternative sources of gas supply to the domestic market and increase its domestic production. Ukraine will be able to ensure its energy security provided it gets rid of the dictatorship of the monopoly gas supplier.

The leading American consulting company IHS CERA in 2012 completed a review of the Ukrainian gas potential at the behest of Ukraine's government. It concluded that in 2015 gas production in Ukraine would increase due to significant investments from domestic and foreign investors, as well as through the use of modern technology. This will lead to an increase in domestic gas production by about 14 billion cubic meters annually in 2025 and 26 billion cubic meters in 2035.

Ukraine currently produces about 20 billion cubic meters of natural gas annually. According to the forecasts of the Ministry of Energy and Mines, by 2017 Ukraine will be able to increase its gas production by 34.6%, up to 27 billion cubic meters annually. By the same time, the volume of Russian gas purchased by Ukraine will have been reduced to 12 billion cubic meters annually (the plan for 2013 is 18 billion cubic meters).

A significant cost reduction of the state budget to pay for imported fuel will also be ensured through energy efficiency and conservation programs, which have been stepped up by the government.

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