Ukraine will sign a deal with Chevron Corp. (CVX) on Nov. 5 to develop shale gas in western Ukraine , a government minister said Wednesday, as the country attempts to cut its reliance on Russian gas.

"The government has approved the draft agreement that will be signed at an investment forum on Nov. 5," Ecology and Natural Resources Minister Oleg Proskuriakov told reporters.

Under the deal approved by Ukraine 's government on Tuesday, Chevron will invest $350 million in exploration for shale gas at the Olesska field in western Ukraine , Prime Minister Mykola Azarov said Tuesday, Interfax news agency reported. The investment could rise to $10 billion, and the field could produce as much as 10 billion cubic meters of gas per year, he said.

Chevron's top representative in Kiev confirmed the deal, but couldn't say when it would be signed.

"The government is going through its process and we're looking forward to signing," said Peter Clark, Chevron's country manager for Ukraine .

Ukraine signed a similar deal in January with Royal Dutch Shell PLC (RDSA). Ukraine is trying to find alternative sources of gas to reduce its dependence on Russia . The government in Kiev says the price it pays for Russian gas supplies is too high.

The announcement of the signing Wednesday came as Ukraine said it hoped to solve the issue of a payment owed to Russian state gas company OAO Gazprom (GAZP.RS) in the next two days.

On Tuesday, Gazprom demanded that Ukraine settle an overdue bill of $882 million for August supplies, raising fears of a repeat of supply problems that disrupted winter deliveries to Europe twice in recent years. Previous payment disputes led Gazprom to cut flows to Ukraine in 2006 and 2009, disrupting supplies to some European countries that receive Russian natural gas via Ukraine .
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