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Russia blasts plan to modernize Ukraine's gas transit system
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08:55, March 24, 2009

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Russian Energy Minister Sergei Shmatko on Monday blasted a plan of the European Union (EU) and Ukraine to modernize the gas transit system that carries Russian gas to the EU through Ukraine.

"It is surprising that the text (of a draft declaration) does not make a single reference to Russia as a gas supplier and as a strategic partner for the EU and Ukraine in this field," Shmatko told an international conference on the modernization of Ukraine's gas transit system.

He said the Ukrainian system was part of the former Soviet gas transit system and has "organic links" with Russia.

"In order to reduce technological risks, any process involving the modernization of the gas transit system in Ukraine would be left in a void in the absence of close coordination with Russia," he said.

Shmatko said Russia is ready to be involved in the modernization of Ukraine's gas transit system, including the provision of finance.

Ensuring reliable long-term gas supplies to Europe is a key priority of Russia in its cooperation with the EU in the energy sector, he said.

The unilateral nature of the declaration gives causes for concern and puzzlement, said Shmatko. "A unilateral approach, not taking on board suppliers' interests, would lead to a skewed system and the whole system would need to be radically reviewed."

Such a system would damage EU's energy security while Russia's participation would be a benefit for all sides, he argued.

"The main goal of cooperation, in our view, is to ensure a long-term balance of the interests of all sides and to ensure guarantees of the supply of Russian gas to EU territories," he said. The exclusion of Russia is "quite intolerable," he added.

Shmatko also pointed out that the expansion of the Ukrainian gas transit system envisaged by the declaration is not in line with the principle of diversification of energy sources.

Currently 80 percent of EU gas imports from Russia, or about 20 percent of EU's total gas consumption, are transited through Ukraine.

"Since the Ukrainian system transits most of the Russian gas to Europe, its modernization would need to involve the entire chain of stakeholders, beginning with producers, transiters and consumers," said Shmatko.


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