Ukraine's Yanukovych Proposes Gas Consortium with EU and Russia

Ukraine’s President Viktor Yanukovych pushes for a trilateral gas transmission consortium with the European Union and Russia, denying the rumours about a privatization of the gas transmission system (GTS).

“The modernization of the GTS is possible in the bilateral format with European partners and in the trilateral format with Russian partners. However, there is one condition that the Ukrainian state should remain the owner of the GTS,” Yanukovych said in a note released on Thursday.

Ukraine’s authorities said to wish for a trilateral consortium on a parity basis to raise funds to modernize the transport system. Yanukovych opened the door to European investors several times.

“The Commission continues to offer engaging in talks on a trilateral consortium, if all three parties - EU companies, Ukraine and Russia - are interested,” Marlene Holzner, EU Energy Commissioner spokeswoman, said in May on the occasion of a two-day roundtable with EU Energy Commissioner Günther Oettinger and Ukraine’s Energy and Coal Industry Minister Eduard Stavytsky. Gazprom did not take part in the meeting. 

Russia does not want EU to be involved in the Ukrainian gas sytem. In May, ambassador to Ukraine Mikhail Zurabov said Moscow would commit to transport at least 60 billion cubic meters (bcm) of gas through the Ukrainian transport system if a bilateral gas transport consortium was created with Kiev.

Ukraine’s gas pipelines are currently owned and managed by the state Ukrtranshaz company, a subsidiary of Naftohaz.