KIEV, May 23 - Ukraine, Georgia, Azerbaijan and Moldova at a summit on Tuesday decided to strengthen their alliance that is expected to play a key role in establishing alternative energy supplies to the European Union.

The alliance, previously known as GUAM, obtained the status of a full-fledged international bloc to be headquartered in Kiev and will be called the Organization for Democracy and Economic Development GUAM.

The bloc will focus on ???forming a democratic space, security, humanitarian and social development, European and Euro-Atlantic integration,??? President Viktor Yushchenko said after the summit.

The creation of the bloc is a bold step in promoting energy supply routes linking the Caspian Sea basin and consumers in the E.U. allowing to reduce heavy dependence on Russian energy.

One of the main projects to be promoted is launching supplies of Caspian Sea crude oil from Azerbaijan and Kazakhstan via Georgian and Ukrainian pipelines to markets in Europe.

???First of all, we are interested in new projects for oil transportation,??? Yushchenko said. ???We are ready to provide our oil transportation system for this project, including Odessa-Brody oil pipeline.???

The bloc is challenging Russian monopoly on oil and natural gas supplies to the Central Europe and seeks to provide access to oil- and gas-rich areas bypassing the Russian territory.

???Azerbaijan holds unique oil production capacities, Ukraine as well as Georgia and Moldova have unique transit capacities,??? Yushchenko said. ???We should to use them.???

Ukraine seeks to start moving Caspian oil via pipelines in Azerbaijan and Georgia and later by oil tankers across the Black Sea to an oil terminal near Odessa. The oil would later be moved via Odessa-Brody pipeline that is already hooked up through Druzhba oil pipeline with Slovakia and the Czech Republic.

However, the plan also calls for extending the Odessa-Brody pipeline to Plock of Poland, which is already hooked up with a major oil terminal and an oil refinery in Gdansk.

Polish President Lech Kaczynski joined a meeting with the leaders of Ukraine, Georgia and Azerbaijan on Monday in Kiev to promote the plan, according to Yushchenko??™s press service.

Odessa-Brody oil pipeline was completed in August 2001 and has capacity of moving 12.5 million metric tons of crude, but it had so far failed to start the Caspian oil shipments.

Under pressure from the Russian government, Ukraine was forced to allow shipments of Russian crude via Brody-to-Odessa route for exports by oil tankers through the Black Sea.

However, the situation changed last year when Yushchenko, a pro-Western leader, had been inaugurated to the presidency in Ukraine and had pledged to replace the Russian shipments with the Caspian supplies.

The pipeline would bypass Russia on the way to Ukraine and to the E.U.

Russia cautiously reacted to the strengthening of the GUAM predicting the alliance would fail without forging cooperation with Russia.

???Any friendship against or any partnership against [Russia] would be ineffective,??? said Mikhail Margelov, the head of the international relations committee in the Council of Federation, Russia??™s upper house of Parliament.

???It is hard to talk about economic effectiveness of any organization in the former Soviet Union without Russia,??? Margelov said, according to RIA Novosti, Russian state news agency.

But GUAM members thought to downplay their anti-Russian course.

???We have not gathered here to be friends against somebody,??? Azerbaijani President Ilkham Aliyev said. ???We gathered here to work and solve our internal problems.??? (tl/ez)