Ukraine is pressing ahead with talks with Russia and the European Union on modernizing its gas transportation system, Prime Minister Mykola Azarov said Tuesday at a meeting with an EU commissioner.

Ukraine suggests the EU and Russia take part in upgrading the system that pumps some 80% of Russian gas to European countries. Ukraine plans to attract $6.5 billion in investment for the purpose by 2018.

"The government will keep trying to achieve progress in the talks with the Russian Federation on gas supplies and transit. I hope the EU will be proactive in this regard," Azarov said at a meeting with EU Commissioner for Enlargement and European Neighborhood Policy Stefan Fule.

"Everyone should reckon with the fact that Russia produces gas, the EU consumes it and Ukraine ensures Russian gas supplies to consumers," Azarov said, RIA Novosti reported.

The Ukrainian authorities earlier called on Russia to drop the idea of building the South Stream pipeline, which would bypass Ukraine, but Russian officials said Moscow still plans to go ahead with the project, despite its interest in managing the Ukrainian gas transportation system.

The South Stream project envisions construction of a pipeline to transport Russian gas along the Black Sea bottom to Bulgaria and on to Europe. The pipeline is also promoted by the Russian authorities as a rival to the Nabucco project.

Russian gas exports to Europe via a pipeline in Ukraine have been disrupted several times in recent years over pricing rows with Kiev. The most recent dispute in early 2009 left Europe without Russian gas for nearly two weeks.

Kiev earlier discussed the issue of modernizing its pipelines with Russian energy giant Gazprom, but the sides have not yet come to an agreement. Gazprom CEO Alexei Miller said his company may fund the modernization if Ukraine's gas company Naftogaz merges with Gazprom, but Ukraine has so far opposed the idea.


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