Ukraine's Ministry of Energy and Coal Industry of Ukraine expects to sign a credit agreement for modernization of the gas pipeline "Urengoy-Pomary-Uzhgorod" in November with the European Bank for Reconstruction and Development and with the European Investment Bank, the Information-Analytical Bulletin of the Cabinet of Ministers of Ukraine informs.

The total cost of the project is 519 million USD, of which 308 million USD is the aforementioned credit. The remaining funds will be provided by NAK Naftogaz of Ukraine, which operates the national gas transportation infrastructure.

Ukraine's gas transportation system (GTS) is one of the largest in the world, its length is 37,100 km, including gas pipelines – 22,200 km and laterals – 14,900 kilometers. 

Given the strategic importance of the Ukrainian gas transportation infrastructure to ensure the energy security of Europe, which is confirmed by the European Union, the Ukrainian government intends to implement a set of measures to build a gas hub on the base of the Ukrainian gas transportation system, which will play a key role in ensuring a stable operation of the European energy market.

Experts say Ukraine has a unique system of Underground Gas Storages (UGS) of the total active capacity over 31 billion cubic meters of gas, almost on the border with the European Union. Considering this, the creation a gas hub in Ukraine can be extremely interesting both for Ukraine and the EU countries, primarily those in Eastern and Central Europe.

Ukrainian Prime Minister Mykola Azarov is convinced that our country has a great potential to play an important role on the European continent, as it has a unique geopolitical location and significant hydrocarbon reserves.
According to Günther Oettinger, EU Energy Commissioner, investments of international organizations will "breathe a new life" in the Ukrainian gas transportation system in the coming years.

This will attract new transit gas flows to ensure an active load of the Ukrainian gas transport infrastructure.

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. 

Therefore GTS modernization and development of the network of Ukrainian UGS meet the interests not only of Ukraine, but also Ukraine's partners - the European Union and Russia.


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