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Ukraine expanding energy diversification
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Wednesday, 08 May 2013

Ukraine's visiting energy minister said that Ukraine is working to become an energy hub, producing its own gas, developing storage and importing from both the European Union and Russia,.

The European Union is pressing for agreements to be sealed with Ukraine by the end of this year as both parties seek to dilute Russian dominance as a gas supplier. But Kiev is torn between EU cooperation and Russia's promise to cut its gas bills in return for control of its pipelines.

At the end of April, Ukraine's government asked parliament to lift a ban on the privatization of state energy firm Naftogaz, which includes pipelines that pump Russian gas to Europe. That could allow Kiev to sell or lease them to Russia's gas export monopoly Gazprom.

Mr Eduard Stavytsky, Ukraine's Energy Minister and Mr Guenther Oettinger, EU Energy Commissioner raised the possibility of a 3 way relationship at talks in Brussels on Friday.

Mr Stavytsky said that "Ukraine is really trying to consider its geopolitical situation and to establish a gas hub, so we will be able to do spot purchases in central Europe."

Mr Guenther Oettinger said that he believed EU firms were willing to buy into Ukrainian infrastructure. He did not name potential investors, but energy firms were at the closed-door talks, including ExxonMobil and Royal Dutch Shell. None were immediately available to comment.

Mr Stavytsky added that USD 550 million was needed to modernize Ukraine's infrastructure, of which Naftogaz could provide USD 240 million, while the rest would come from loans.

Source - Reuters


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