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Yushchenko asks Azeris for pipeline help
Journal Staff Report

KIEV, Sept. 9 - President Viktor Yushchenko called on Azerbaijan Friday to jointly work on the project of building a natural gas pipeline linking vast Caspian Sea gas deposits with European markets via Ukraine, bypassing Russia.

This is the first time that Yushchenko has expressly called for the construction of such a pipeline, which would significantly reduce Russia’s energy clout in Europe.

Yushchenko mentioned the gas pipeline project after two-hour talks with his Azeri counterpart, Ilkham Aliyev, on Thursday seeking to boost cooperation in the energy sector.

Yushchenko’s primary goal at the talks was to secure supplies of Caspian Sea crude oil from Azerbaijan via the Baku-Supsa oil pipeline and then by oil tanker to Odessa and further to Europe, bypassing Russia. Azerbaijan, which is expected to accelerate oil and natural gas output within two years, has tentatively agreed to back the oil supply route.

But Yushchenko went further, suggesting the cooperation should also extend to arranging supplies of natural gas along the same route, a project that is even more important due to huge demand for gas in Ukraine and in Europe.

“Ukraine is interested in forming a joint position on the issue of gas supplies practically along the same route: from the Caspian Sea to Ukraine and to the European Union,” Yushchenko said.

The project underscores Ukraine’s efforts to reduce dependence on Russian energy, including crude oil and natural gas, less than a year after Gazprom has briefly suspended gas deliveries in the middle of the winter.

Ukraine has been long considering increasing supplies of natural gas from Central Asia and from the Caspian region. A pipeline which currently moves Turkmen gas to Ukraine via Uzbekistan, Kazakhstan and Russia apparently has an insufficient capacity, Turkmen officials have said.

Yushchenko has been earlier speaking in favor of building a gas pipeline across Russia for arranging greater gas supplies from Turkmenistan. But Russia has so far been lukewarm to this idea as it would make it harder for Gazprom to compete with cheaper Turkmen gas on the European markets.

Yushchenko’s comments after talks with Aliyev suggest that Ukraine may now have been abandoning that idea and would seek a quick construction of the pipeline that would bypass Russia.

Russia, which supplies a third of European Union's annual gas needs, has been seeking to maintain and strengthen its strategic role as a major supplier of energy despite looming reduction of domestic gas output.

The new pipeline suggested by Yushchenko would apparently go under the Black Sea, linking Georgia and Crimea to hook up with Ukraine’s vast gas pipeline infrastructure, making it possible to send gas to Europe. Georgia is already linked by a gas pipeline with Azerbaijan, whose own gas extraction is expected to accelerate within two years.

Meanwhile, the issue is sensitive and may trigger an angry reaction from Russia, which supplies about 25% of Europe's gas needs and seeks to boost its market share, analysts said.

Russia, which ships about 85% of its gas exports to Europe via Ukrainian pipelines, has been threatening to build its own pipeline under the Baltic Sea to Germany to reduce dependence on Ukraine.

Should the Russian gas supplies be diverted to the bypass route, Ukraine would lose its transit revenue and face a major energy import challenge. (sb/ez)




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