18.01.2009
January 14, 2009 (the date of publication in Russian)
Sergey Pravosudov
IS IT A WASHOUT?
Russia and Europe ought to make up their minds about what to do with Ukrainian GTS
The latest gas crisis has shown that the system of gas transit through the territory of Ukraine needs fundamental reforming. Since the collapse of the USSR Ukraine has been amassing debts for the supply of gas, withdrawing blue fuel from Europe transit gas pipelines in case of the decline in volumes of deliveries. Already few years ago Russia offered to gather a tripartite consortium on the control of Ukrainian gas pipeline system to solve the problem. Ukrainian Naftogaz, Gazprom and German E. ON Ruhgas were offered to become the participants.
In 2003 Leonid Kuchma, the President of Ukraine of that time, approved the signing of memorandum about the creation of the tripartite consortium. Obviously, he decided to take this step because of the forthcoming presidential elections. During this elections Russia supported Victor Yanukovych, who was moved forward as a Leonid Kuchma's successor. But Victor Yushchenko, supported by the USA, won the elections as the result of so-called "orange revolution". It's not a secret that his second wife Kateryna Yushchenko (born Chumachenko) is a former official with the U.S. State Department.
The new Ukrainian government forgot about the creation of tripartite consortium immediately. On the contrary, Victor Yushchenko and Yulia Timoshenko, the head of Ukrainian government, more than once repeated that gas transport system was a "national heritage of Ukraine", so no foreigners would be allowed to take part in administrating this strategic asset.
At the same time, everyone knew Ukrainian GTS declined gradually. It was found as far back as the USSR existed, but the government of the independent Ukraine didn't give required consideration to its repairing and modernization. By the way, building a new Bohorodchany-Uzhhorod gas pipeline, which would allow increasing the level of gas supply to Europe (when Naftogaz couldn't finance the project itself) was one of the aims of the consortium. Last years Ukraine has constantly been demanding special non-market conditions of gas supply; and more – it couldn't even find money to pay for the blue fuel even with artificially reduced prices.
This year Russia has made a firm decision: indebtedness must be discharged, further deliveries must be based on market prices, and the control over the gas supply must be given to international observers. But till now Ukrainian government agreed only to the last point, though they have been against including Russian professionals in the team of observers for a long time.
There's nothing surprising about this position. As, actually, allowing international control over the work of Ukrainian GTS means making the first step forward the creation of the consortium on the GTS administration. That's why Yulia Timoshenko insisted on including a point of recognition Ukraine as a reliable gas-transiting country into the agreement on international observers' activities, and also limited the term of their work to a month. The presence of foreign experts itself shows that the international community doesn't think Ukrainian government is able to provide reliable gas transit.
Most likely, the USA will go on supporting those Ukrainian politicians, who will stand against Russia. That's natural for the USA, as it doesn't depend on gas transit through Ukraine. It would be much more interesting to watch the behavior of the leaders of European countries. I hope they will support those Ukrainian politicians, who will propose the creation of international consortium for the administration of GTS. And more, not only E.ON Ruhgas might become its participant, but other European gas giants as well.
Sergey Pravosudov is the Director of National Energy Institute, Moscow
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