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Ukraine to Reduce Russian Gas Dependence

Ukraine wants to build its first liquefied natural gas terminal on the Black Sea by the end of 2016 as it seeks to reduce dependence on Russian gas imports.

The terminal will cost US$1.21 billion to US$1.38 billion and will reduce dependence on Russia by around one-third, Petro Miroshnikov from Ukraine’s National Project state body, the manager of the project, said in handout given to reporters in Kiev on Tuesday.

The LNG terminal is planned to be situated near Odessa. Other possible locations were Ochakov in the Mykolayiv region or Feodosia in Crimea.

Once the terminal is complete, the country can import as much as 10 billion cubic meters of liquefied natural gas every year.

Miroshnikov told reporters that the government would announce a tender this month to work out a detailed blueprint for the terminal, which could cost about US$4 billion.

Ukraine, the major consumer of Russian natural gas, ships about 60 percent of needed gas and has repeatedly said the price for it is too high to allow domestic goods to compete on the world markets.

This year, the country will import at least 36.5 billion cubic metres (bcm) of gas compared to 26.8 bcm in 2009 and 49 bcm in 2008.

“The terminal will allow 10 billion cubic meters of gas or 20 percent of our gas balance to be imported. We are talking about a serious diversification of our gas import system,” Miroshnikov said.

According to the National Project state body, Ukraine may import fuel from the Middle East, North Africa and Azerbaijan. The country is seeking to sign supply contracts by the first quarter of 2013.

Azeri President Ilham Aliyev said last week that he was looking to strengthen energy issues cooperation with Ukraine.

According to government data, gas from Azerbaijan would travel a route of about 2,300 kilometers.

The former Soviet state wants to attract investors to the project.

Miroshnikov said an international venture with as much as 10 percent of the state stake would be established next year.

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