Shell and public joint-stock company Ukrgazvydobuvannia have started building a site to drill a second exploratory well in Kharkiv region under a production sharing agreement, the press service of Shell in Kharkiv and Donetsk regions has reported.

"The site for the Novo-Mechebylivska-100 well is located in the Blyzniuky district of Kharkiv region, within the administrative boundaries of Novonadezhdyne rural council. The construction of a site for a drilling rig, equipment and temporary premises for workers has been started. All of the work is being carried out in line with the requirements of Ukrainian law and international environmental protection standards," reads the report of the press service.

The drilling site will be 300 meters long and 200 meters wide. Before the start of the construction, soil will be removed and kept near the site so the area can be restored later. Some 2,400 concrete slabs made in Kharkiv region will be used to build the site. A temporary approach road 120 meters long will be built to minimize traffic via nearby settlements. Around 80 workers from Ukraine's Montazhtransgaz company will be used to build the site.

The start of drilling of the well is scheduled for the autumn of 2013 after all of the required permits are obtained. The goal is to explore for natural gas in sandstone formations.

As reported, Shell plans to invest about $200 million in gas deposit exploration in Kharkiv region under an agreement on joint activities with Ukrgazvydobuvannia.

The contract foresees the drilling of three exploratory wells, and then exploration and production of hydrocarbons in compacted sand layers on an area of about 1,300 square meters.

In October 2012, as part of the agreement on joint activities, the drilling of the first Biliayivska-400 well was started (Pervomaisk district, Kharkiv region).

Ukrgazvydobuvannia's output accounts for about 75% of gas production in Ukraine. The company operates in eleven regions, and has four gas field divisions: Shebelynkagazvydobuvannia, Poltavagazvydobuvannia, Kharkivgazvydobuvannia, and Lvivgazvydobuvannia.