Ukraine's leading English-language newspaper since 1995

Ukraine does not have the necessary financial resources for modernizing and developing its own gas-transport system. Creating a gas-transport consortium is the most promising and realistic way to attract major European energy companies to investment projects for upgrading and developing Ukraine's gas-transportation system, Naftogaz Ukrainy chief Yevhen Bakulin said.

"A consortium would help with integrating Ukraine's gas-transport system with the European energy market and prevent energy crises in the future," Bakulin said in an article in the weekly 2000, co-written with his advisor Yaroslav Yaremchuk and Ukrtransgaz executive Ihor Shvachenko.

The authors think Ukraine does not have the necessary financial resources for modernizing and developing its own gas-transport system.

If no consortium is created, they argue, building projects for new trunk gas pipelines and terminals for loading liquefied natural gas will lead to surplus gas on the European market after 2015. They cite as evidence that after 2020 Ukraine will lose its status as a transit state, and its transport system will be moving gas only for the country's own needs.

Ukrainian President Viktor Yanukovych argued earlier for the necessary reduction of Russian gas prices. He suggested a return to the idea of creating an international gas-transport consortium for the joint management of Ukraine's gas-transport system.

First Deputy Prime Minister Andriy Kliuyev said on Friday that after such a consortium is set up, the system would be transferred to a concession. In his view, any gas-transport consortium ought to unite Russia (a gas supplier), Ukraine (a transit state), and the European Union (a gas consumer).