| KIEV, June 19
KIEV, June 19 Ukraine's parliament agreed on
Thursday to discuss a bill to allow gas transit facilities to be
leased on a joint venture basis with participation from firms in
the European Union or United States.
Ukraine would hold 51 percent and foreign partners would be
offered 49 percent in the venture, which would manage both
transit pipelines and underground gas storage facilities.
Suffering a third cut-off of natural gas supplies from
Russia in under nine years, and with bilateral relations in
crisis, Ukraine is desperate to become less dependent on Russian
gas, but at the same time to provide more reliable transit for
the Russian gas that Europe needs.
The government said the joint venture would bring in
investment and remove the need for the South Stream pipeline,
which Russia's Gazprom is building to take gas to
southeastern Europe across the Black Sea, avoiding Ukraine.
It would also aim to boost Ukraine's capacity to receive
"reverse flows" of Russian gas reimported back from EU
"If Europeans join this company, Russia will not build South
Stream," Prime Minister Arseny Yatseniuk told parliament. No
date was set for discussion of the bill.
South Stream has fallen foul of EU competition authorities,
who object to the fact that it will not be open to other gas
producers. However, a number of EU countries including Germany,
Austria and Bulgaria are strongly in favour, and European Energy
Commissioner Guenther Oettinger said on Monday that it was a
project the EU could accept.
If it is built, the pipeline threatens to deprive Ukraine's
badly strained budget of the transit fees that it currently
receives from Russia for gas heading towards Europe.
The EU imports 30 percent of its natural gas needs from
Russia, and about half of that comes via Ukraine, with some
already having been diverted through the Nord Stream pipeline
under the Baltic Sea.
Its supplies were briefly cut off in 2006 and 2009 when
Ukraine argued with Russia about the price of its gas.
GAS CUT OFF
The flow to Ukraine has now been cut off again after Kiev
refused to accept a price rise imposed by Russia following the
ousting of pro-Moscow president Viktor Yanukovich in February.
However, Ukraine, whose new president Petro Poroshenko plans
this month to sign the association and free trade agreements
with the EU that his predecessor shunned, has continued to allow
transit gas to flow normally across its territory.
Oettinger, who has been mediating in the dispute, has said
he hopes to bring both sides back to the negotiating table by
For its part, the EU has tried to support arrangements for
Ukraine to be able to re-import Russian gas back from other
parts of eastern Europe, to help it offset in part any
disruptions to supplies from Russia.
Ukraine, which consumes about 45 billion cubic metres of gas
a year and supplies just less than half that from its own
production, has said it expects to receive about 6 bcm in
reverse flows from EU countries this year.
Yatseniuk has said total gas volumes shipped to Ukraine from
the EU could reach 15 bcm a year.
In April, Germany's RWE began deliveries via
Poland under a framework that allows for delivery of up to 10
bcm of gas per year.
And Slovakia has agreed to make technical adjustments to an
old unused pipeline so it can ship over 3 bcm of gas a year,
rising to up to 10 bcm from next spring.
(Reporting by Pavel Polityuk in Kiev; writing by Katya
Golubkova and Kevin Liffey, editing by David Evans)