A Review of the Nigerian Energy Industry

Gazprom rejects Ukraine gas pipeline proposal

Oando's 128 Km gas-pipeline01 July 2014, News Wires – Gazprom has shrugged off a Ukrainian proposal to bring in Western companies to invest in the natural gas pipeline which crosses the country, saying other transit routes bypassing Ukraine still promised to make the pipeline redundant.

Gazprom’s comments came as Ukraine and Russia, at odds after Russia annexed Ukraine’s Crimea region in March, remained locked in a multi-billion dollar dispute over unpaid gas bills.

The Ukraine idea on pipeline investment is part of a response to Moscow’s decision to temporarily cut gas supplies on June 16, following Kiev’s failure to pay some of its gas debts.

Ukraine wants to share necessary investment in the ageing pipelines as it needs the transit fees it generates for its strained budget. But Gazprom says it has alternatives that mean it won’t be dependent on the Ukraine link.

“It won’t anyhow affect us. But let’s not forget that its (Ukraine pipeline’s system) age is more than 35 years with no needed investments done,” Gazprom deputy chairman Alexander Medvedev said yesterday.

Future gas talks between Moscow and Kiev could also be complicated after the EU signed a trade pact with Ukraine and warned it could impose more sanctions on Russia.

A couple of years back Gazprom had wanted to get at least partial control over Ukraine’s gas pipeline to oversee its gas flows to Europe, but failed to agree with Kiev. This time, Russia was not invited by the pro-Western government to consider joining a possible investment consortium.

Gazprom chief executive Alexei Miller told a briefing yesterday the company had no interest in the project.

Gazprom earlier said its gas flows to Europe via Ukraine increased yesterday despite the standoff.

Gazprom had cut gas supplies to Ukraine in June after several rounds of fruitless talks between Russia, Ukraine and the European Commission. Russia subsequently said it would not revise the price until Kiev pays $1.95 billion to cover part of its debts, raising the possibility of gas flow cuts to Europe.

Miller told a briefing Gazprom had started pumping gas into European storages, expecting to pump over 5bn cubic metres. Yet this would not be enough to cover a significant increase in demand if there were stoppages.

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