KIEV, June 27 - A declaration on building South Stream, a radical new route for transporting natural gas from Russia to Europe bypassing traditional transit countries is a logical result of Ukraine's nearsighted policy, the Ukrainian Fuel and Energy Ministry told Interfax.

Ukraine lost initiative in new gas transit projects in 2005 and the first half of 2006, a ministry source said.

A number of remarks and steps by certain Ukrainian political groups and officials have also been harmful to confidence building between Ukraine and Russia, he said.