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Ukraine to take further steps towards energy independence - Azarov

August 29, 2012, 14:44 UTC+3

Ukraine will maintain its trend of reducing gas imports and replacing them with coal, - he said

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KIEV, August 29 (Itar-Tass) — Ukraine’s government plans to pursue policy towards increasing the country’s energy independence, Prime Minister Nikolai Azarov told a Cabinet meeting on Wednesday.

“Ukraine will maintain its trend of reducing gas imports and replacing them with coal. It is more advantageous for Ukraine to use cheaper coal over Russia’s high gas price,” he said.

The prime minister noted that in 2012 Ukraine reduced gas consumption almost by 3 billion cubic meters, while its import slumped by almost 12 billion cubic meters.

“We are targeted at implementing projects to replace natural gas consumption with domestic coal production,” Azarov said.

The China State Bank will open a special credit line to finance projects on the replacement of gas with coal worth 3.656 billion U.S. dollars.

“After the implementation of the first five projects within the framework of this agreement we will be able to significantly strengthen our country’s energy security and save up to 1.2 billon U.S. dollars a year on the average,” he said.

According to Ukrtransgas, the country’s gas pipeline operator, in January-July Ukraine reduced the import of Russian gas by 39 percent to 18.738 billion cubic meters as against the same period of 2011. Over this period Ukraine’s gas consumption reduced by 7.3 percent, the Energy and Coal Industry Ministry said. Over the seven months the country’s gas production increased by 0.9 percent to 11.8 billion cubic meters.

At the same time in January-July Ukraine’s coal consumption increased by 5.8 percent to 34.995 million tonnes, including by 11.7 percent to 5.337 million tonnes in July. Over this period the country’s coal production also grew by 5.8 percent to 50.2 million tonnes.

Ukraine tries to decrease its energy dependence on natural gas it buys from Russia “at an unfair price”, Azarov said.

Ukraine’s Energy and Coal Industry Minister Yuri Boiko announced earlier his country’s intention to reduce gas imports to 27 billion cubic meters in 2012 as against 40 billion cubic meters Ukraine bought in 2011 and 52 billion cubic meters it should import in compliance with the gas contract signed by ex-prime minister Yulia Timoshenko in January 2009.

Ukraine seeks reconsideration of the gas agreement with Russia insisting the existing gas price is too high.

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