Ukrainian Gas Infrastructure Requires Heavy Investment of $1.5 to $2B

At least $1.5-$2 billion dollars has to be allocated for the maintenance of Ukraine's gas transportation system annually, the Russian ambassador to Ukraine and the founder of Gazprom, Viktor Chernomyrdin, said in a joint interview to ITAR-TASS and Vesti TV news channel today.

"Some 120 billion cubic meters of gas is pumped through Ukrainian gas pipelines each year. This is one of the first systems created in the Soviet Union and it needs to be serviced," Chernomyrdin said.

"It requires colossal investments in its maintenance, upgrades and new equipment," he added. "It will soon be time to replace pipes in the gas mains. This is a huge amount of work. On average, between $1.5 billion and $2 billion dollars has to be invested in this system each year," Chernomyrdin added. "An international consortium was established in 2003 in order to secure the investment. Gazprom's other major European partners such as Eni, Gaz de France and others have expressed their readiness to participate in the consortium," he said.

"The consortium would be able to be responsible for all matters, would be earning money and would be ensuring the system's maintenance for the benefit of everyone -- consumers, producers and transit nations," Chernomyrdin said.

The consortium has been set up, "all documents were signed but then a period of coordination began and a campaign was launched claiming that the transportation system is a national treasure and it cannot be given away", he said. "There have been delays, tricks have been played. There has been one election after another [presumably in Ukraine]. The result is that we have (gas conflicts) in December and January each year," he said.

Commenting on the signing of the Brussels declaration by Ukraine and the EU, Chernomyrdin said he was certain that it had been adopted by "people who totally failed to understand what they were signing". "It envisaged not only upgrades but also raising capacity by 60bn cubic meters. Who is going to increase this? This is still Russian gas and for the foreseeable future, it is still Russian gas which will be flowing in this direction," he said.

"Not asking the opinion of customers, not asking the opinion of the supplier is equivalent to constructing a road without thinking about those who are going to use it for travel," Chernomyrdin said.

"We are the ones producing energy, supplying energy and carrying out contracts. We are responsible for this. Someone has decided they are smart enough to play tricks. They are not smart enough as far as these problems are concerned. Such problems should not be made political," the Russian envoy said.

BBC Monitoring. Copyright BBC.