Prime ministers of Ukraine and Poland reaffirm common stand on pipeline issue (11/05/00)

Prime ministers of Ukraine and Poland reaffirm common stand on pipeline issue

by Roman Woronowycz
Kyiv Press Bureau

KYIV - The heads of government of Ukraine and Poland said in Warsaw on October 26 that their two countries would continue to stand together on the demand that Kyiv have some sort of involvement in a new natural gas pipeline that will bypass Ukraine.

During a two-day meeting of the Polish-Ukrainian bilateral commission for trade and economic cooperation, the two sides agreed to the formation of an ad hoc intergovernmental commission to be headed by the vice prime ministers of energy of each country. The commission will delineate the two countries' common position.

Poland's Prime Minister Jerzy Buzek said the two countries would develop a mutual strategy for the delivery of Russian natural gas to Western Europe through their countries.

"We have declared such and this is the basis for our talks," said the Polish prime minister, according to Interfax-Ukraine.

After first rejecting an unexpected proposal by Russia's Gazprom natural gas monopoly in consortium with four Western European natural gas suppliers to build a transit pipeline through Poland and Slovakia that would bypass the established Ukrainian pipeline, Poland's President Alexander Kwasniewski changed course and agreed to the construction of the supply line - provided the Ukrainian side is involved in the project.

Although Ukraine's Prime Minister Viktor Yuschenko stressed in Warsaw that the two sides will act jointly in providing natural gas to Western Europe, he again questioned the need for another transit line, when he repeated earlier statements that Ukraine's natural gas pipeline is 30 percent underutilized.

Mr. Yuschenko said that not only does the Ukrainian pipeline now only move about 110 billion cubic meters in a system that has the potential to carry 170 billion cubic meters annually, but also that he believes a modernization program - which Ukraine and Russia have agreed to undertake jointly - would increase capacity by some 70 billion cubic meters annually to about 230 billion cubic meters.

"There is no problem today with ensuring 100 percent of Europe's energy needs through Ukrainian territory," said Mr. Yuschenko, as he attempted to dispel the notion that Ukraine was incapable of transporting Europe's current and future needs through its territory.

Europe expects that by the year 2008 it will need about 180 billion cubic meters of Russian natural gas annually.

However, as Mr. Yuschenko well knows, the real question is not whether Ukraine can supply the quantities needed to Western Europe but whether it can resist illegally siphoning off large amounts of the energy source to sate its cravenous energy appetite, which is ruining its reputation as an honest and trustworthy supplier.

Russia has repeatedly accused Ukraine of stealing at least 10 billion cubic meters of gas annually, to which Ukraine has admitted, while pledging that it would no longer illegally redirect gas. Moscow also has had trouble obtaining payment for the natural gas the country takes legally, which has become the major problem in relations between the two countries.

Ukraine's problems are multiplied by a Western Europe that really has no preference as to how the natural gas it needs to obtain relief from its heavy dependence on Mideast oil gets there. The fact that the consortium led by Russia's Gazprom includes the major natural gas providers of Western Europe makes it a virtual certainty that the new Polish-Slovak line will indeed be built.

Officially, however, it is expected that nothing will be decided until the European Commission meets to examine the matter of the pipeline. Ukraine's Minister of Fuel and Energy Serhii Yermilov said he would travel to Brussels next week to meet with members of the EC. Meanwhile, EC President Romano Prodi is expected in Kyiv in the first part of November.

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