Ukraine To Invest EUR790m In Gas Pipeline

KIEV, Ukraine -- Ukraine is ready to invest up to 790 million euros ($1.03 billion) to acquire a 10% stake in the trans-Caspian gas pipeline project, Prime Minister Mykola Azarov’s press service reported Friday.

The investment will be made under the condition that an offshoot to the Georgian oil port of Kulevi in the eastern coast of the Black Sea is built.

Ukraine plans to transport liquefied natural gas from Kulevi by tankers to the planned Ukrainian LNG terminal Pivdenniy near Odessa, according to the press service.

The new gas pipeline is supposed to go through the territory of Azerbaijan and Georgia, bypassing Russia.

During the meeting with Azeri President Ilham Aliyev in Baku earlier in the week, Azarov expressed Ukraine’s intention to participate in construction of the trans-Caspian gas pipeline, provided all the parties involved reach an agreement, according to the press service.

The projected transporting capacity of the trans-Caspian gas pipeline is 30 billion cubic meters per annum.

It will allow transferring gas from Turkmenistan to Nabucco – the alternative pipeline to the Russian South Stream.

The latter is known to be lobbied by Gazprom.

The overall cost of the trans-Caspian gas pipeline project is estimated at 7.9 billion euros ($10.3 billion).

Russia was reported to be reluctant to the trans-Caspian gas pipeline project.

Russia's foreign ministry argued that Baku and Ashgabat had no right to build a pipeline without consent of all Caspian littoral states due to the undecided legal status of the Caspian Sea seabed.

Azerbaijan insists that it can solve this problem by making a bilateral agreement with Turkmenistan.

Conveniently, Ukraine completed the feasibility study of the LNG terminal Yuzhny last week.

As a result, the project worth 846 million euros ($1.1 billion) has been offered to foreign investors.

The expected gas transfer capacity of the terminal is 10 billion cubic meters per year with the prospect of doubling its capacity later on.

The design and construction phase of the project is estimated at 49 months.

President Viktor Yanukovych in September 2011 offered Russia to run the South Stream gas pipeline through southern Ukraine.

This could decrease its construction cost five times - from 25 billion euros ($32.7 billion) to 5 billion euros ($6.6 billion).

Currently, the pipeline is designed to go through the Turkey's waters of the Black Sea.

Source: Ukrainian Journal