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Yanukovych, at UN, asks for energy effort
Journal Staff Report

NEW YORK, Sept. 21 – President Viktor Yanukovych, addressing the United Nations General Assembly in New York on Wednesday, called for a coordinated international effort to ensure global energy security.

The call comes as relations between Kiev and Moscow have recently hit a new low over disagreements over natural gas prices and supply volumes, potentially threatening energy supplies to Europe.

“We call for the development of effective mechanisms of multilateral cooperation under the U.N. coordination role for securing goals in the energy sector,” Yanukovych said.

Russia has three times cut off gas supplies to Ukraine since January 2006, including twice disrupting gas supplies to Europe, most recently in January 2009.

The developments spurred discussions in Europe, led by Poland, over creation of a NATO-type organization that would make sure supplies of energy to the European Union are secured.

Yanukovych made the energy security initiative an important part of his New York visit agenda, also discussing the issue with energy companies earlier in the day.

Royal Dutch/Shell has recently become the first foreign company to get awarded a contract for the exploration and development of shale gas deposits in Ukraine. Shell plans $800 million investment.

Exxon Mobil is expected to follow the suit and may be joined by at least four other companies as Ukraine seeks to open itself for foreign investments in the energy sector.

At a breakfast with executives of U.S. businesses, Yanukovych said the government will make sure that regulations are business friendly for the development of the energy resources.

“Ukraine will greatly accelerate its work towards the development of oil and gas on its territory and create conditions in this respect that are in line with European standards,” Yanukovych said.

In addition to highlighting the oil and gas sector, Yanukovych also pitched alternative energy projects, such as wind farms, hydro-power projects and solar power plants.

He said the government will invest in infrastructure, such as building power transmission lines, helping to increase exports of power from Ukraine to markets in Europe.

“The exports are growing year after year,” Yanukovych said. “This market is very promising.”

The calls for greater international energy security come as Yanukovych is due to visit Moscow on September 24 for talks over natural gas with his Russian counterpart Dmitry Medvedev.

At the talks, Yanukovych may suggest Russian joining a trilateral joint venture that would also include Russian and European energy companies to operate a massive natural gas pipeline network.

Ukraine currently ships up to 80% of Russia’s Europe-bound gas supplies, but Russia has been seeking to build more pipelines bypassing Ukraine, potentially reducing Ukraine’s role as a major energy shipper.

“We have a constant dialog underway with Russia,” Yanukovych told reporters. “It’s a tough job, but it is necessary, it is extremely important and, by the way, we got used to it.”

Meanwhile, analysts were skeptical that Yanukovych’s idea of creating the trilateral joint venture would actually interest Russia, which has been seeking to take the gas network under its total control.

“If the idea of the joint venture did not materialize nine years ago, it is unlikely that it will succeed now,” Mykhaylo Honchar, the head of the energy department at the Nomos think tank.

The Russians are “confident that they can concentrate control over the entire pipeline network,” he said. (tl/ez)




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