KYIV, April 9 – Ukraine stands to lose more than dlrs 1 billion in transit fees if Russia and European countries decide to build gas pipelines that bypass the country, experts said Tuesday.
Volodymyr Saprykin, an energy expert at Ukraine’s Razumkov center for economic and political research, said he expects Russia to reduce gas supplies in the near future while it considers building alternative transit facilities in Belarus, Poland and Slovakia. If Russia goes ahead with the plans, it will substantially undermine Ukraine’s transit importance. “It means the loss of Ukraine’s monopoly for gas transit,” Saprykin said, addressing government officials at a round table in Kyiv. “It may not happen today, but it’s possible in five to seven years.” The proposed new pipelines would divert 60 billion cubic meters (2,100 billion cubic feet) or two-thirds of all gas that transits Ukraine annually.
Meeting participants said Ukraine may remain a core gas transit country in Eastern Europe if it reforms its pipeline system and pursues objections against the proposed pipelines in the international court of arbitration. Russia supplies about a quarter of Europe’s natural gas, of which about 90 percent transits Ukraine, bringing the country dlrs 1.5 billion in annual revenue. Gas has been an irritant in strained relations between the former Soviet countries. Russia started talks with Ukraine’s neighbors about alternative pipelines about two years ago, after accusing Ukraine of illegally siphoning off gas and allowing its debts for official imports to increase. Ukrainian officials have said the country has stopped siphoning and settled its debts. Speculation has swirled recently that Russia might abandon the project to appease investors who have expressed concern about the pipeline’s cost.
