FX.co ★ China to help Ukraine produce synthetic gas from coal

Ukraine’s Energy Ministry signed a long-expected deal with China’s National Chemical Engineering contractor and its subsidiary Wuhuan Engineering on constructing an energy plant to produce synthetic gas in Ukraine. The Energy Ministry reported it in a media release. The agreement was reached when Ukraine’s President Viktor Yanukovych was visiting the People’s Republic of China.
The project is to be a part of Ukraine’s program aiming to replace natural gas with coal. Ukraine’s state gas and oil company Naftogaz signed a $3.7 billion credit agreement last year with China’s state-owned Development Bank to finance the program.
The project implementation will allow Ukraine to save to 4 billion cubic meters of natural gas and create over 2,000 jobs. Besides, the country is supposed to ensure a sales market for 10 million tons of coal annually. China is ready to provide the technology to build the plant since the country has been dealing with the synthetic gas production from coal for a long time. Besides, China is going to build 9 more plants capable of producing 37 billion cubic meters of gas in total annually.
In the meantime, Ukraine is desperately trying to cut its dependence on costly Russian natural gas being the key source of fuel in the country. Nowadays, according to the agreement of 2009, Russia has been supplying gas to Ukraine at prices about $400 per 1,000 cubic meters which are considerably higher than an average market price. Ukraine has received 33 billion cubic meters of gas from Russia in 2013.