EU Energy Commissioner Guenther Oettinger has said investments of international institutions will «breathe new life» in the Ukrainian Gas Transportation Systems (GTS) over the coming years.

Given the events in North Africa, the accident at the Japanese Fukushima Nuclear Power Plant and the general European trend to cut down the number of nuclear power plants, the Europe’s demand for Russian gas will stay up and supplies through Ukraine will never fall.

Even if the North and South Stream pipelines are used at full capacity, Ukraine will still be needed as a transit country for energy supplies. According to research of the Razumkov Center, at least 60 billion cubic meters of gas will come through Ukrainian GTS, the Information-analytical Bulletin of the Cabinet of Ministers of Ukraine says.

The modernization of GTS and development of the Ukrainian network of Underground Gas Storages (UGS) is in the interests of Ukraine, EU, and Russia, experts say. Ukrainian GTS and UGS can play a key role in the strategic stability of the European energy market. Their modernization and development is a large-scale, long-term project. It is difficult both technically and politically, but doing so will increase the energy security of Europe.

Everyone understands that among all the options for natural gas in Europe, the Ukrainian GTS is the most cost effective. In order to make full use of its potential, it is necessary to ensure equal and mutually beneficial cooperation between Ukraine, EU and Russia. Ukraine’s government has repeatedly stressed its interest in switching from talks about the need for cooperation to real action. In recent years, the gas conflict between Ukraine and Russia has demonstrated the need for the general coordination of the EU energy security with the full participation of Ukraine.

The Ukrainian Government has expressed its readiness to provide full support to companies which will be involved in modernization of GTS, including both Ukrainian companies, and foreign ones.

According to NAK Naftogaz of Ukraine, the total cost of reconstruction of the Ukrainian GTS is estimated at 5.3 billion USD. Such investment will ensure the transit of gas to Europe in the amount of 145 billion cubic meters annually until 2030.


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