* Region approves shale exploration in west of country
* Ukraine seeks shale gas production
* Ukraine aims to cut gas imports from Russia
KIEV, Oct 3 (Reuters) - A second regional council in Ukraineon Thursday approved a government draft for a $10 billion shalegas production-sharing agreement with U.S. energy major Chevron, clearing the way for it to be signed.
Deputies in Lviv region voted by 66-to-3 in favour of thedraft, which calls for shale exploration in the Olesska field inthe west of the country.
A council in the neighbouring Ivano-Frankivsk region, whoseapproval was also necessary, backed the deal last month.
"Now we will submit the documents to the Cabinet ofMinisters and then there will be the signature," Energy and FuelMinister Eduard Stavytsky said by telephone from Lviv.
The Olesska deal with Chevron will be the second shaleagreement in Ukraine, following one signed earlier this yearwith Royal Dutch Shell for exploration in Yuzivska inthe east.
Shale exploration forms part of plans by Ukraine todiversify its energy sources and ease its dependence on costlynatural gas imports from Russia.
Speaking to the council, Stavytsky said on Thursday thatChevron would spend several years and $350 million to assessreserves at Olesska which covers 5,260 square kilometres.
Total investments including extraction after exploratorydrilling could reach $10 billion, he said.
Deputies in both regions had expressed concern over theecological consequences of the "fracking" process, in whichwater and chemicals are used to break up rock, sandstone andshale deposits to release gas.
Stavytsky says the two shale gas projects could provideUkraine with an additional 11 to 16 billion cubic metres (bcm)of gas in five years' time.
Gas production in Ukraine totals about 20 bcm, while thecountry of 46 million people consumes around 50 bcm every year.Ukraine imports gas from Russia at about $400 per 1,000 cubicmetres.
Ukraine has repeatedly said it wants to diversify energyimports and cut supply from Russia having failed to reach acompromise with Moscow on pricing.