The modernization of Ukraine’s gas infrastructure would make the South Stream project redundant, because all the additional volumes that Southern Europe needs could be delivered without constructing a hugely expensive pipeline across the Black Sea. Pavel K. Baev writes:The key issue that Gazprom is facing now, however, is not Shtokman or energy efficiency, but the Ukrainian dilemma. Viktor Yanukovych, Ukraine’s newly-elected president is keen to normalize relations with Russia, which for him means first of all to re-negotiate the deal that resolved the gas crisis of January 2009 and secure a significant cut in gas prices, because his budget is in the deficit too deeply even by Greek standards. Paying a visit to Moscow last week, Yanukovych was eager to make every possible reconciliatory gesture, but the only trump card he could play was the control over Ukraine’s gas infrastructure (Nezavisimaya Gazeta, March 5). Selling the proposition for organizing an international consortium with Gazprom’s participation would not be easy, particularly with Yulia Timoshenko leading the opposition camp, but it does make solid economic sense (www.newsru.com, March 6). Read the story here.