Ukraine is relying on the European Bank for Reconstruction and Development (EBRD) for a project to modernize Ukraine's gas transportation system, the Ukrainian prime minister said.

Mykola Azarov met on Thursday a delegation from the EBRD led by Managing Director for Turkey, Eastern Europe, Caucasus and Central Asia Olivier Descamps.

"Our task is to modernize the [gas transportation] system so that our pipeline becomes the most profitable and efficient for pumping gas to Europe," Azarov said, RIA Novosti reported.

"It is a serious and important job and cooperation with your bank on this issue is very important to us."

Azarov said in March that Ukraine would have to raise at least $15-20 billion to modernize its gas transportation system.

Descamps said that the bank's council of directors was interested in how Ukraine was planning to modernize its gas transportation system. He said energy saving was a foremost priority of the cooperation.

In March 2009, Ukraine's previous government led by Yulia Tymoshenko signed a declaration with the EU on the modernization of its gas transportation system, a project which would not have involved Russia. However, Kiev and Brussels subsequently said they would be happy to see Moscow take part.

The new Ukrainian government is seeking closer cooperation with Russia, in particular in creating a gas transport consortium to operate the national gas transportation system.

Russian First Deputy Prime Minister Igor Shuvalov held meetings with the Ukrainian leadership in Kiev on Thursday to discuss Russian natural gas deliveries to Ukraine.

Ukraine's gas transportation system is 37.5 thousand km long and includes 71 compressed air plants and 13 underground gas holders with a total volume of 32 billion cubic meters. The system carries about 80% of Russian natural gas exports to Europe.


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