EU's Oettinger offers aid to help fix Ukraine gas network

FRANKFURT Fri Feb 28, 2014 3:04am EST

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FRANKFURT Feb 28 (Reuters) - The European Union could extend financial aid to Ukraine to overhaul its gas pipeline grid, the bloc's Energy Commissioner Guenther Oettinger said in a German magazine on Friday.

"We are prepared to help with the overhaul of the gas pipeline network of Ukraine," he told Focus magazine in an interview.

"This involves a high triple digit million euros sum," he said.

He said that international finance institutions including the European Bank for Reconstruction and Development (EBRD) could be called upon to forward funding for the plan.

Ukraine is the most important transit country for gas from the Russia while also taking its own gas mainly from Russia.

While it is seeking to reduce its reliance on its big neighbour, pipeline usage fees form a big part of its budget.

Because the pipelines are in disrepair, gas is lost in transit and repairs eat into income from transit charges.

Gas price disputes with Russian state-controlled gas export monopoly Gazprom have disrupted supplies to Ukraine and the EU.

Brussels itself needs to bring in 25 percent of its gas from Russia and wants to help make Ukraine more of a gas trading hub for the region, with reverse flows of gas in both direction, rather than a mere transit country. (Reporting by Vera Eckert, editing by William Hardy)

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