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Ukraine, Turkmenistan talk on reviving gas supply
February 13, 2013 / 1:21 PM / 5 years ago

Ukraine, Turkmenistan talk on reviving gas supply

* Ukraine eyes cheaper Turkmen gas, offers to ship it to Europe

* Russia owns pipelines, will have a final say

* Ukraine energy minister evades talk of Moscow's role

By Marat Gurt

ASHGABAT, Feb 13 (Reuters) - Ukraine on Wednesday started talks with Turkmenistan on resuming imports of its natural gas to ease a dependence on expensive Russian supply, but any deal would need the consent of Moscow which owns the pipeline.

Ukrainian President Viktor Yanukovich is visiting the Central Asian nation after Kiev failed to renegotiate its gas deal with Moscow.

Ukraine cut imports from Russia last year, but that strategy backfired last month when Moscow sent Kiev a $7 billion bill for the gas it had refused to buy, citing a "take or pay" clause.

"I have reiterated Ukraine's interest in resuming natural gas imports from Turkmenistan, as well as our readiness to deepen cooperation in this sphere," Yanukovich told reporters after talks with his Turkmen counterpart Kurbanguly Berdymukhamedov.

"Our country has every opportunity to unite efforts to work out alternative routes of gas shipments both for our own needs and for further exports to Europe."

Turkmenistan, which holds the world's fourth largest natural gas reserves, sold its gas to Ukraine in the 1990s and until the mid-2000s via Russian pipelines. But since 2006 Ukraine had been buying increasingly expensive gas only from Russia's gas export monopoly Gazprom.

Landlocked Turkmenistan has won support of the European Union and the United States for its plans to build a pipeline across the Caspian Sea to ship gas to Europe, and for another pipeline to run to Pakistan and India via Afghanistan.

However, these projects exist only on paper. Analysts point to serious security risks for the India-bound pipeline which would have to cross chronically unstable Afghanistan.

Ukraine's state oil and gas company Naftogaz signed on Wednesday a memorandum of understanding with Turkmenistan's Oil and Gas Ministry, Ukrainian Energy and Fuel Minister Eduard Stavytsky told reporters in the Turkmen capital Ashgabat.

"Certainly, the talk was about the resumption of Turkmen gas supplies," he said. "We have a pipeline running across northern Turkmenistan and via Russia. So that's what we were talking about."

Asked how Russia would react to such plans, Stavytsky retorted: "Let's first reach an agreement with our colleagues from Turkmenistan, and then we will negotiate with the others."

Ukrainian officials say that a new free trade agreement signed last year by the Commonwealth of Independent States, a club of post-Soviet republics, obliges Russia to allow shipments of Turkmen gas to Ukraine at competitive rates.

Moscow has yet to comment on the idea. It has repeatedly voiced its opposition to Turkmenistan's plans to build a Europe-bound pipeline across the Caspian Sea, citing ecological concerns.

Turkmenistan has two other gas pipelines: going to China and to Iran. It hopes to more than triple gas production potential to 250 billion cubic metres a year by 2030.

Output at the world's second-largest gas field, Galkynysh, expected to start in a few months, is fundamental to that goal.

Writing by Dmitry Solovyov, editing by William Hardy

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