Bloomberg News

Gazprom Gas Pipeline Projects Mean ‘Zero’ Need for Ukraine

February 22, 2012

(Updates with spokesman’s comment in second paragraph)

Feb. 22 (Bloomberg) -- OAO Gazprom, Russia’s natural gas export monopoly, claimed that slated pipeline projects, such as seabed lines directly to the European Union, will eliminate reliance on Ukraine to transit the fuel to Europe.

“South Stream to full capacity, Nord Stream with additional lines and our existing capacity through Belarus and the Black Sea will reduce Ukraine’s importance for transit to zero,” Gazprom spokesman Sergei Kupriyanov said in an e-mailed statement today.

Ukraine ships as much as 80 percent of Russia’s Europe- bound gas through its Soviet-era pipeline network. Disputes over the cost of Russian gas to Ukraine and its transit led to a halt in supplies to Europe in the winter of 2009. Ukraine is now seeking price reductions from Gazprom.

Gazprom Chief Executive Alexey Miller accused Ukraine of siphoning gas destined for Europe during a cold snap this month in a briefing with Russian President Dimitry Medvedev today, according to a statement on the Kremlin website. Ukraine’s state-run energy company NAK Naftogaz Ukrainy denied the allegation in an e-mailed statement.

Medvedev urged Gazprom to move ahead with the construction of the South Stream pipeline via the Black Sea to the E.U. starting this December, according to the Kremlin statement. The Nord Stream pipe carries gas from Russia across the bottom of the Baltic Sea to Germany. Both pipelines bypass Belarus and Ukraine.

--Editors: Alex Devine, Reed Landberg

To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net

To contact the editor responsible for this story: Torrey Clark at tclark8@bloomberg.net


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