25.05.09

Steady operational maintenance of Ukraine's gas pipeline system requires an annual investment of 1.5 to 2.0 billion U.S. dollars, Russian ambassador in Kiev Viktor Chernomyrdin, who was one of the founding fathers of the gas producer and exporter Gazprom, said Thursday in an interview with Vesti news channel.

"About 120 billion cubic meters /bcm/ of gas is pumped via Ukraine's pipeline systems annually," Chernomyrdin said. "This was one of the first pipeline networks created in the Soviet Union and it should be serviced."

"Its maintenance, modernization and equipment replacement requires huge spending," he said.

Chernomyrdin indicated, for instance, that time is getting closer and closer when pipe at main pipelines should be changed.

"This is huge work, and the system on the whole requires from 1.5 to 2.0 billion dollars annually," he said.

To find the necessary finance, an international consortium including Russia, Ukraine and Germany as the largest consumer of gas was set up in 2003, and Gazprom's other major European partners, like Eni of Italy and Gaz de France showed readiness to cooperate with it, Chernomyrdin recalled.

"This consortium would have assumed responsibility for all the issues, would have earned money and would have kept the whole system in a condition that would be lucrative for everyone - producers, customers and transit countries," he said.

"First, the consortium was set up and all the documents were signed but then the coordination process began and then a campaign picked pace /in Ukraine/ suggesting that the pipeline system is national heritage and no one should give it away to anyone," Chernomyrdin said.

In the meantime, "no one feels like taking it," he said adding that he meant reliability of the whole system.

"Yet the dragging of feet began, and then there were the elections and once again tricks began, and in the end we have a gas conflict each December or January," Chernomyrdin said.

He also commented on the Ukraine-EU Brussels declaration, saying: "It was adopted by people who just didn't understand the essence of what they were signing."

"Apart from the modernization as such, the pipelines' productivity is expected to go up 60%," he said with reference to the declaration. "But who will raise it? This is Russian gas, and it's this gas that will continue flowing towards Ukraine in the foreseeable future."

"A failure to ask the customer or the supplier is tantamount to building a road without asking in advance if anyone is going to use it at all," Chernomyrdin said. "Someone of little practical wit decided to play these games."

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Source: Itar-Tass