Ukraine hopes to sign a loan agreement this September with the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB) worth $308 million on funding the modernization of the Urengoi-Pomary-Uzhgorod gas pipeline, Energy and Coal Industry Minister Eduard Stavytsky has said.
“We expect that we will open this credit line in September this year,” he said at a press conference in Kyiv on Monday.
As reported, on March 23, 2009, the Ukrainian government, the European Commission, the EBRD, the EIB and the World Bank (WB) signed a joint declaration following an international fundraising conference on the modernization of the Ukrainian gas transport system.
Later, preliminary agreements were reached on the allocation by international banks of $1.5-2 billion to Ukraine for the modernization of the GTS, but their implementation was postponed due to Kyiv’s delaying reforms in the gas sector.
Ukraine announced in the summer of 2011 that it was launching a project to modernize the country’s gas transport system that, according to preliminary estimates, is to cost $5.3 billion over five to seven years. Investment in upgrading the trunk pipelines will enable Ukraine to cut costs by improving the system’s efficiency.
The priority gas transport system upgrade projects in Ukraine are the western transit corridor (Soyuz, Urengoi-Pomary-Uzhgorod and Progress pipelines) and the southern corridor (Yelets-Kremenchuk-Kryvy Rih and Ananyiv-Tiraspol-Izmail pipelines).
Investment in the first phase of this reconstruction is estimated at $519 million. The plans call for securing $154 million each from the European Bank for Reconstruction and Development (EBRD) and European Investment Bank, and another $211 million will come out of national Ukrainian oil and gas company Naftogaz Ukrainy’s own coffers. The cost of subsequent phases will run to about $505 million.
The Ukrainian section of the Urengoi-Pomary-Uzhgorod gas pipeline is 1,160 kilometers long and 1,420 millimeters in diameter.
Ukraine’s gas transport system has throughput capacity of 288 billion cubic meters at intake and 178.5 billion cubic meters at outtake, including 142.5 billion cubic meters to countries in Europe and 3.5 billion cubic meters to Moldova.
Natural gas transport through Ukraine to countries in Europe and the CIS last year was down 19.1% on the year before, at 84.261 billion cubic meters.
