* Commission says helping to broker funding for
* Reverse flow pipeline deal still possible
(Updates throughout with Commission comment)
FRANKFURT Feb 28 The European Union could
extend financial aid to Ukraine to overhaul its gas pipeline
network, the bloc's Energy Commissioner Guenther Oettinger said.
Ukraine is an important transit pipeline route for Russian
natural gas supplies to Europe and current political tensions
there follow the government's decision to spurn a pact with the
EU in favour of closer ties with Russia.
"We are prepared to help with the overhaul of the gas
pipeline network of Ukraine," Oettinger said. "This involves a
high triple digit million euros sum."
Oettinger's comments, confirmed by the European Commission
on Friday, were made in an interview with German magazine Focus.
Commission spokeswoman Sabine Berger said the executive was
"acting as a facilitator for the international financial
institutions to provide the necessary loans" to help modernise
Ukraine's ageing infrastructure.
Ukraine stunned the EU by spurning a trade deal in November
and President Viktor Yanukovich's decision to side instead with
Russia triggered mass protests, which led to his ouster.
The nation's new rulers have said the country needs at least
$35 billion over two years to stave off bankruptcy.
There is also uncertainty over a December deal on gas from
Russian exporter Gazprom which slashed prices for
Scarred by pricing disputes in the past, which prompted the
Russians to cut off gas to Ukraine as well as EU transit
customers, both the EU and Russia have sought alternatives.
Russia has been building pipelines to bypass Ukraine and the
EU has sought alternative suppliers and ways to reduce Ukraine's
gas dependency on Russia.
Ukraine is part of the EU's energy community, which includes
eight nations from southeast Europe and the Black Sea region.
Its aim is to create a more joined-up energy market across the
As part of Ukraine's energy community membership, the
Commission is seeking to convert Ukraine from a gas transit
nation almost totally dependent on Russian gas into an energy
hub producing its own fuel and developing storage.
It has also been working on a reverse flow pipelines to
allow gas to flow into Ukraine from the EU as well.
One of the most significant is a reverse flow link through
Slovakia, which the European Commission has said is all but
agreed but has yet to be signed because of current turmoil in
The spokeswoman said the European Commission had helped to
broker a deal and was still ready to offer help if Ukraine gas
transit monopoly Uktransgaz were ready to sign.
(Reporting by Vera Eckert in Frankfurt, Alexander Ratz in
Berlin, and Barbara Lewis in Brussels; editing by William Hardy
and Jason Neely)