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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

Wednesday, Sept. 3


Although the Peter and Paul Fortress sand sculptures are more central and therefore more visible to the throngs of tourists, the 300th Anniversary Park of St. Petersburgs own collection closes today. The World Collection of Sand Sculptures that have been on display at the park reaches its final day, so fans of the classic beach activity should get there while they can.



Thursday, Sept. 4


Vladimir I. Danchenkov, Head of Baltic Customs, will be in attendance during AmChams Customs and Transportation Committee Meeting convening this afternoon at the organizations office near St. Isaacs Square at 3 p.m.



Friday, Sept. 5


Scrabble lovers and chess masters get their chance to assert their intellectual dominance at the return of the British Book Centers Board Game Evenings tonight. Held weekly on Friday nights, the event gives both board game lovers and those hoping to improve their English the chance to meet, greet and compete. Check out the centers VK page for more details.



Saturday, Sept. 6


Athletes will relish the chance to get the latest gear and try out something new at I Choose Sport, an annual event at Lenexpo forum that plans to welcome more than 30,000 people this week to the international exhibition center. Not only will visitors get to try their hand at various athletic endeavors but they will also be able to peruse equipment that can fulfill their dreams of becoming a champion.


Local KHL team SKA St. Petersburg open their season this evening at home against Lokomotiv Yarovslavl at the Ice Palace arena next to the Prospekt Bolshevikov metro station. See their website for a full schedule and available tickets.



Sunday, Sept. 7


Check out retro and antique cars at Fort Konstantin on Kronstadt Island in the Gulf of Finland at FORTuna, a yearly car festival that highlights the eccentricities of the Soviet automobile industry. A car race, contests and a stunt show will give visitors a chance to rev their engines.



Monday, Sept. 8


This evening marks the opening of the two-week ballet festival High Season at the Mikhailovsky Theater. Check the theaters website for more details about performances and featured dancers.



Tuesday, Sept. 9


Discuss the latest news and issues at the AmCham Hazardous Waste Management Roundtable this morning in the Tango Conference Hall of the Sokos Hotel Palace Bridge on Birzhevoy Pereulok. Starting at 9 a.m., planned topics include the Krasny Bor landfill and waste transportation between Russia and Finland.


Learn more about the citys modern architectural trends at the SPIBA Real Estate and Construction Committees meeting on the topic Contemporary Petersburg Style: What is It? Participants will get the chance to discuss whats in-demand with RBI Holdings Irina Petrova and Lubava Pryanikova, and the current state of the local real estate market. Please confirm your attendance by Sept. 5 through SPIBAs website if you wish to attend.



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