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Ukrainian Gas System Unlikely to Find U.S., EU Investors

Published: July 5, 2014 (Issue # 1818)



  • If the South Stream pipeline project is completed, then by 2015 Ukrainian pipelines will no longer be needed for Russian gas exports.
    Photo: Gazprom

Ukraine's move Friday toward attempting to sell nearly 50 percent in its gas pipeline system to EU and U.S. investors does not mean that Western buyers will rush to take up the offer, as the system's value depends on a steady supply of Russian gas, energy analysts told The St. Petersburg Times.

Amid the current standoff with Russia over unpaid bills for gas imports, Ukraine's parliament passed a bill in its first reading Friday that envisages the creation of a Ukrainian gas transportation operator of which European and U.S. investors could own up to 49 percent.

The move appeared to be Ukraine's attempt to retain control of the revenues that transporting Russian gas to Europe brings, just as Russian state energy giant Gazprom moves towards construction of the planned South Stream pipeline, which will bypass Ukraine on its way to Europe.

Russia supplies about a third of Europe's total gas requirements via pipelines running through Ukrainian territory, and has coveted control of the transport system for the last two decades. Kiev has rejected attempts by Russia — Ukraine's main gas supplier — to take control of the transport system amid a series of acrimonious gas wars that have seen Russia's Gazprom turn off shipments to Ukraine several times in the past few years over unpaid bills.

Battling South Stream

The bill excludes Russia from ownership in the system by only accepting as shareholders companies owned and controlled by residents of the EU, U.S. or European Energy Community, of which Ukraine is a member but Russia is not. The company must also belong to the European Network of Transmission System Operators of Gas. The same conditions apply for operators of Ukraine's subterranean natural gas storage facilities.

Ukraine's Prime Minister Arseniy Yatsenyuk told parliament Friday that the energy situation in Ukraine is "critical" and "part of a war that Russia has rolled out against Ukraine."

"Russia is trying to tighten as many screws as possible on us," he said, according to the Ukrainian government's website.

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ALL ABOUT TOWN

Saturday, Aug. 23


Uppsala Park plays host to Fairy Noon today, a performance of five separate fairy tales ranging from folk classics to more haunting selections. There will be three different renditions of the tales throughout the day and tickets start at 500 rubles ($13.80) for adults and 300 rubles ($8.30) for children.


Classic Finnish cartoon characters the Moomins expect to receive a warm welcome from Russian fans during today’s Moomin Festival at the Pearl Plaza Shopping Center at 51 Petergofskoye Shosse. Become a kid again or introduce a new generation to the beloved creation of Finnish writer Tove Jansson.



Sunday, Aug. 24


The tortured genius of Dutch master Vincent van Gogh gets his day in the center’s Konnushnaya Ploschad during Make Art Like Van Gogh, a daylong celebration of the artist that will allow amateur artists to try and replicate the work that made the famed painter world-renowned.


Experience a variety of dances highlighting the diversity of the world around as at the final day of the Ethno-Dance International Dance Festival that has been at the St. Petersburg Humanitarian University of Trade Unions this past week. Tonight’s performance will feature Egyptian dancers accompanied by local orchestras.



Monday, Aug. 25


Today kicks off the Elena Obraztsovoy International Competition for Young Vocalists in the large hall of the Shostakovich Philharmonic. Talented youngsters will showcase their range over the next six days before a winner is chosen on Aug. 30.



Tuesday, Aug. 26


Love movies but hate all those words? Then check out Rodina Cinema Center’s Factor of Consensus film forum this evening. Silent movie classics from the beginning of the 20th century will be screened and accompanied by a pianist, who will provide the soundtrack for the ongoing action. The screenings begin at 7 p.m. Check Rodina’s website for more details.



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