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Nation    

Central Asia gas a priority for new govt
Journal Staff Report

KIEV, Oct. 19 - Ukraine’s likely new government coalition pledged to work hard to eventually secure supplies of Central Asian natural gas to Europe via the country’s gas pipelines, according to a coalition agreement released Friday.

President Viktor Yushchenko’s Our Ukraine-People’s Self-defense and the group led by former Prime Minister Yulia Tymoshenko, which will now control a majority in Parliament, plan to form the government before the end of October.

The two pro-Western groups are to replace the pro-Russian government of Prime Minister Viktor Yanukovych as they outperformed his Regions Party at the Sept. 30 parliamentary snap election.

Ukraine’s “chief priority” will be keeping its status as a gas transit nation and “creating new opportunities for exports of gas from the Central Asia to the European Union,” according to the coalition agreement.

The clause in the agreement addresses concerns that Russia may build several gas pipelines bypassing Ukraine on the way to its main gas market, the European Union. This would dramatically reduce Ukraine’s $2 billion annual revenue from gas transit.

Ukrainian pipelines supply up to 80% of Russian Europe-bound gas, while the rest goes via Belarus. However, Gazprom has been threatening to build Nord Stream, a pipeline across the Baltics all the way to Germany, effectively bypassing Ukraine and Belarus.

This may leave Ukrainian gas pipelines less busy, which the Ukrainian leaders believe must be used to boost exports of gas from Turkmenistan and other Central Asian nations.

Turkmenistan, which is thought to contain the world’s third biggest natural gas reserves, used to be the main supplier of gas to Ukraine for five years until early 2006.

But Gazprom, using its monopoly ownership of Russian gas pipelines that are used to move Central Asian gas to Ukraine, moved in January 2006 to enforce its option to buy all gas from Turkmenistan and then re-sell it to Ukraine.

Ukraine’s plans to seek Central Asian gas supplies to Europe bode well with the European Union’s plans to reduce dependence on Russian energy imports.

This comes amid fears that Russia has been increasingly using its energy monopoly for putting political pressure on neighbors to try to change their foreign policies.

The same fears have forced Ukraine, Poland, Lithuania, Georgia and Azerbaijan to seek construction of an oil supply route that would move Caspian Sea crude to markets in the European Union bypassing Russia.

But the plans to arrange supplies of gas from the Central Asian to Europe bypassing Russia go much further and may hit hard Gazprom, which has been persistently seeking to bolster its position in the region.

The plans, however, may face several technical challenges, including perhaps building a pipeline across the Caspian Sea from Turkmenistan to Azerbaijan, then to Georgia, across the Black Sea to Ukraine.

This route will most likely have significant political challenges and will likely trigger a major opposition from Russia, analysts said.

Russian President Vladimir Putin, while speaking in Tehran earlier this week, said any construction of pipelines in the Caspian Sea area must be approved by all countries that have access to the Sea, including Russia, Iran, Turkmenistan, Kazakhstan and Azerbaijan.

The EU has been already considering plans for building Nabucco gas pipeline, which would link Iran, which is thought to contain the world’s second biggest deposits of natural gas, with Turkey, Austria, Romania and Bulgaria.

Ukraine’s pro-Western government coalition also expressed interest in joining the Nabucco project, according to the coalition agreement. (sb/ez)




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