EU Funding to Update Ukrainian Pipelines Due in Autumn

Ukraine hopes to confirm funding this year for a major pipeline overhaul, via the European Bank for Reconstruction and Development (EBRD).

The European Investment Bank (EIB) would also be involved in a loan of approximately €237 million ($308m). The money would go to modernizing the Urengoi-Pomary-Uzhgorod gas pipeline, according to Ukrainian Energy Minister Eduard Stavytsky.

"We expect that we will open this credit line in September this year," he said Monday at a press conference in the capital, Kiev.

Four years ago the Ukrainian government, the European Commission, the EBRD, the EIB and the World Bank (WB) signed a joint declaration after an international fundraising conference for the Ukrainian gas transport system. Better infrastructure will help Ukraine become more independent and competitive in its gas provision, escaping some of its reliance on Russia.

Ukraine announced in the summer of 2011 that it was launching a project to modernize the country's gas transport system that, according to preliminary estimates, is to cost $5.3 billion over five to seven years. Investment in upgrading the trunk pipelines will enable Ukraine to cut costs by improving the system's efficiency.

Last year the EBRD said it was prepared to participate in the loan, but Ukraine would have to carry out certain conditions, including the overhaul of its national utility, Naftogaz.

The priority gas transport system upgrade projects in Ukraine are the western transit corridor (Soyuz, Urengoi-Pomary-Uzhgorod and Progress pipelines) and the southern corridor (Yelets-Kremenchuk-Kryvy Rih and Ananyiv-Tiraspol-Izmail pipelines).