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Development Of “Tied” Gas Can Make Ukraine Self-Sufficient, Panelist Says

Jan 30, 2018 | Featured

Marco Levytsky, NP-UN Western Bureau.

Ukraine has the potential not only to become self-sufficient in natural gas supplies, but to export to Eastern Europe as well, participants at a networking meeting regarding Alberta’s recent trade mission to Ukraine were told, January 25.

But such reserves are embedded deep in the ground and need special technology, like hydraulic fracturing to extract them, said Mario Krpan, Director of the Midstream Oil and Gas Industry Development Branch of Alberta Economic Development and Trade.

That is where Alberta can help because it is a world leader when it comes to the development of such technology, he added during the panel discussion, which was co-sponsored by the Ukrainian Canadian Professional & Business Association of Edmonton as well as Canada Ukraine Chamber of Commerce – Alberta, held at the Ukrainian Youth Unity Complex in Edmonton.

Hydraulic fracturing (also known as “fracking”) is a well stimulation technique in which rock is fractured by a pressurized liquid. The process involves the high-pressure injection of ‘fracking fluid’ (primarily water, containing sand or other proppants suspended with the aid of thickening agents) into a wellbore to create cracks in the deep-rock formations through which natural gas, petroleum, and brine will flow more freely. When the hydraulic pressure is removed from the well, small grains of hydraulic fracturing proppants (either sand or aluminium oxide) hold the fractures open.

Hydraulic fracturing is highly controversial in many countries. Its proponents advocate the economic benefits of more extensively accessible hydrocarbons. Opponents argue that these are outweighed by the potential environmental impacts, which include risks of ground and surface water contamination, air and noise pollution, and the triggering of earthquakes, along with the consequential hazards to public health and the environment.

Krpan said that conventional natural gas reserves in Ukraine have been depleted due to inefficient Soviet extraction techniques, and since Ukraine no longer gets gas from Russia, it has to import it from Eastern European countries which, in turn, get it from Russia.

“The long-term solution is to develop natural gas in Ukraine,” he noted.

Krpan said that as a result of the meetings that he held with Ukrainian officials during that trade mission Alberta will be proposing an expert to sit on the advisory board of Ukraine’s state company NaftoGaz and will also be proposing one for UkrEnergo.

This will help improve relations as well as provide a chance to promote Alberta expertise, he noted.

Jessica Littlewood, MLA for Fort Saskatchewan-Vegreville, and Parliamentary Assistant to Economic Development and Trade Minister Deron Bilous, who led the October mission, said that in addition to oil and gas, another economic sphere Alberta can greatly help Ukraine in is agriculture.

While touring Ivano-Frankivsk oblast, she noticed that the agricultural potential is greatly underutilized, partly because of outdated farming practices and partly because Ukraine does not have adequate supplies of fertilizer of its own as it is still “chained to Russia” in that regard.

However, there are many fertilizer manufacturing companies in her own constituency who could help fill that void. She also noted that Ukraine is starting to work on land reform.

Littlewood, who is of Ukrainian origin, stressed the value of having Ukrainian Canadian politicians go to Ukraine as they better understand the cultural nuances.

She also said that one of the highlights of the visit was the Alberta flag raising at the Holiday Inn where the delegation was staying as it got media attention and raised the profile of the province and government.

Ukrainian Canadian Congress – Alberta Provincial Council (UCC – APC) President Olesia Luciw-Andryjowycz stated that the Ukrainian community of Alberta has a high profile in Ukraine.

During her visit she toured some of the military hospitals and saw many of the humanitarian supplies the Ukrainian community here has donated and how grateful people there were for it.

“Our money is getting through one way or another,” she added.

Luciw-Andryjowycz said one of the main objectives of her visit was to renew a Memorandum of Understanding (MOU) with Ivano-Frankivsk Oblast and to sign a new one with Lviv Oblast.

While similar to the MOUs the provincial government signs with, they are geared towards promoting cooperation between various community organizations from both sides, including religious organizations, family networks, education, arts and culture groups, areas of humanitarian assistance, as well as youth, sport, recreation, economic cooperation and volunteerism.

One practical example of how cooperation in the cultural sphere works is the Alberta Council for Ukrainian Arts was able to connect with Kharkiv University by Skype in order to provide a workshop on Petrykivka painting.

But UCC – APC’s prime role in establishing these MOUs is that of a catalyst that gets the individual groups together and lobbies the government to keep working with Ukraine.

“Having a Memorandum of Understanding helps get things started. Once things go on their own you don’t have to go through UCC-APC or government. You will keep them going,” she said.

Vitaliy Milentyev, President of the Alberta Chapter of the Canada Ukraine Chamber of Commerce gave an overview of the trade mission in which over 20 representatives of Alberta companies and government agencies participated, attended an Oil & Gas Trade Show in Kyiv and met with Ukrainian Energy Sector stakeholders.

The delegation stayed at the Holiday Inn in Kyiv, which he noted was a Canadian hotel and to this date the largest Canadian venture of that scale in Ukraine.

Over 100 people participated in a networking reception held in conjunction with a briefing on the Canada Ukraine Free Trade Agreement (CUFTA) held there.

The summary of his impressions was that it led to a better understanding of the Ukrainian business and regulatory environment including the progress on reforms to date, the proximity of the war zone, appreciation for the extent of corruption and bureaucracy in Ukraine and the reforms required in the Ukrainian regulatory system.

It also proved useful in establishing initial contacts with business and government as well as demonstrating the “on the ground support provided by the Embassy of Canada and the Canada-Ukraine Chamber of Commerce.

Responding to a question from New Pathway – Ukrainian News as to the growth of trade between the two countries since the implementation of CUFTA in August of last year, he noted that trade with Alberta has grown by 100% while trade with Canada as a whole has grown by 60%.

However, these figures should not be overestimated since trade with Ukraine constituted only 0.05% of Canada’s total international trade priori to CUFTA, so that any increase would be “humongous”.

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