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Talks on consortium for Ukrainian gas system to start in January 2014

December 25, 2013, 20:23 UTC+3 KIEV
Ukraine will choose such a form of consortium for running its gas transportation system that will be “most beneficial” for the country
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KIEV, December 25./ITAR-TASS/. Negotiations on the creation of a consortium for managing the Ukrainian gas transportation system will begin in January 2014, Minister of Energy and Coal Industry Eduard Stavitsky said on Wednesday, December 25.

He said suggestions had been made by both the European Commission and Russia.

“As for the arrangements made earlier with investors and European banks for investing in the modernisation of our gas transportation system, we are not going to stop there and we will by all means start implementing them in the first quarter [of 2014],” the minister said.

Ukraine will choose such a form of consortium for running its gas transportation system that will be “most beneficial” for the country in order to ensure “sufficient gas transit volumes” and control over the gas transportation system, Stavistky said earlier.

Ukraine is conducting negotiations “with all interested parties” and considering several options, including a bilateral consortium with Russia or a trilateral one with Russia and Europe.

Which will be chosen remains to be seen. “Negotiations are underway and I can't answer this question now,” the minister said.

Russia earlier proposed a bilateral consortium for running Ukraine’s gas transportation system, but official Kiev insists that the European Union be a member of the consortium as a gas consumer.

In January 2012, the European Commission sent a letter to the Russian Energy Ministry offering mediation in the gas talks between Moscow and Kiev.

Ukrainian President Viktor Yanukovich said earlier that Ukraine was preparing to upgrade it gas transportation system to keep its reliable and fit for transporting “certain amounts” of gas.

He believes that this can be done by “pooling efforts of consumers, transit operators and gas suppliers.”

According to the president, the format of the future consortium to run the gas transportation system should be trilateral to include Ukraine, Russia and the European Union.

Yanukovich said the system could be leased but the government would retain ownership rights to it. “It is important that the joint venture is not a monopoly, and Ukraine has equal access to the pipelines,” he said, adding that EU countries could participate in the modernisation of the system “if they wish so.”


“We will welcome them. We want to create such a model of cooperation to operate the Ukrainian gas transportation system that will be comfortable for everyone,” the president said.

Ukraine may create a bilateral consortium with Russia for running the Ukrainian gas transportation system, National Security and Defence Council Secretary Andrei Klyuyev said.

However he believes that a trilateral consortium of Ukraine, Russia and the European Union would be better than a bilateral one. “I think that a trilateral consortium is better than a bilateral one today,” he said.

He noted that all conditions and risks have to be considered. “Our national interests are the main factor. And they are that Russian gas supplies to Europe must definitely go through Ukraine in the future and in the ever growing volumes,” he said.

The throughput capacity of the Ukrainian gas transportation is 288 billion cubic metres system at the entrance and 178.5 billion cubic meters at the exit, including 142.5 billion cubic metres to European countries and 3.5 billion cubic metres to Moldova. Natural gas transit through Ukraine to Europe and CIS countries in 2011 increased by 5.7 percent from 2010 to 104,197,067,000 cubic metres, including to Western Europe by 5.9 percent to 101,098,013,000 cubic metres, but decreased by 2.4 percent to 3,099,054,000 cubic meters to CIS countries.

Ukraine’s gas transportation system consists of 72 compressor stations, 110 production shops and 1,451 gas distribution stations. The overall length of gas pipelines operated by the company is 38,600 kilometres, including 22,200 kilometres of trunk pipelines and 16,400 kilometres of extensions.

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