Ukraine: South Stream A Danger For National Interests

Ukrainian Energy Minister Yuri Boiko has stepped up the level of rhetoric in the midst of gas negotiations with Russia.

Boiko stated that the Gazprom led South Stream gas pipeline project "represents danger for Ukraine's national interests."  He stressed that Ukraine "will always act against the construction of this pipeline."

"The more we are modernizing the gas transport system in the country, the less chance there will be to implement the South Stream project, which aims to destroy our gas transportation system", said Boiko.

"The current capacities of the Ukrainian gas transport system allows to use it with additional quantities of Russian gas in transit to countries in Western and Central Europe without expanding (our) gas pipeline system”, he stressed.

Ukraine presently generates significant revenues from transit fees as Russian gas passes through the Ukrainian pipeline distribution network on its way to western European markets.   The implementation of South Stream would see Russian gas bypassing Ukraine.

Ukraine already faces the transit loss of approximately 20 billion cubic metres of gas or just under one-fifth of what the country transported to Europe last year, which will be diverted by the Nord Stream gas pipeline.

The Minister said that the start of the modernization of the Ukrainian gas transport system with the help of funds from the EU is scheduled for mid June 2011. "Renovations will start with the pipeline Urengoi-Pomary-Uzhgorod", he said.