Sidelining Russia won’t help Ukraine, expert says

The expert is convinced that Russia will not revise its gas supply agreements with Ukraine as the contracts have been signed and cannot be changed.

A joint EU-Ukraine conference to modernize Ukraine gas pumping network that was held in Brussels on March 23 was the result of Pres Yushchenko’s diplomatic efforts over the past several years, Yushchenko’s aide on energy security Bohdan Sokolovsky claims.

Under the declaration, Ukraine gas pipelines will be modernized and its annual capacity increased by 60 billion cubic meters at the cost of $5-6 billion. “In fact, it is the most lucrative project in the East-West gas pumping sector. The project will be much cheaper that any other alternative route, be it the Southern Stream or the Northern Stream,” Sokolovsky claims.

Meanwhile, Premier Tymoshenko’s advisor on energy issues Oleksa Hudyma says a political competition for Ukraine and its gas pumping system is unfolding between Europe and Russia. For Ukraine, it means that this time the country will receive real assistance from the EU, whereas the West flouted Ukraine’s interests during the January gas spat with Russia.

To win more ground in the battle for Ukraine’s networks, Russia is sure to give Ukraine the $5-billion credit Tymoshenko requested, Hudyma said.

Hudyma called emotional Russia leaders statements on the Gas Declaration, saying there won’t be any fallout from Russia.

He said that, following a scheduled visit of the Ukrainian premier to Russia, the Kremlin will be forced to take a step forward and offer the $5-biiilon credit to Ukraine to offset the budget deficit and NaftoHaz solvency. This credit won’t have anything to do with the gas pumping system, he observed.

There are no economic reasons for Russia to raise gas prices, Hudyma said. “Once the credit is released, Russia will feel that the balance in the Ukraine-EU-Russia triangle has been restored,” the expert noted.