KYIV, Sept 11 - U.S. firm Louisiana Natural Gas Exports Inc has refused to cooperate with Ukraine over the supply of at least 5.5 billion cubic meters (bcm) of liquefied natural gas (LNG) a year, Reuters reported Friday citing Ukrainian energy minister.

“Indeed, there was a refusal (of cooperation),” Olga Buslavets told a televised briefing, giving no further details.

The company and the Ukrainian government in May signed a memorandum on the prospect of importing LNG in a bid to diversify its energy supplies after relations with its traditional supplier, Russia, collapsed following Moscow’s annexation of Crimea in 2014.

“Our position is and always has been if there is a serious desire for a long-term contract to import U.S. LNG into Ukraine, we are interested,” Ben Blanchet, CEO of Louisiana Natural Gas Exports, told Reuters.

Otherwise it is our policy not to comment on any specific transactions, he added.

The development is a setback for the government which has been actively seeking the supplies of the U.S. gas as a long-term alternative to Russian gas in the region.

The memorandum also called for the construction of a pipeline link between Poland and Ukraine to enable deliveries from the Polish LNG terminal in Swinoujscie to the border of Ukraine.

The supplies of gas from the U.S. were supposed to last for 20 years, according to the memorandum. The gas was supposed to be delivered to massive Ukrainian underground gas storage facilities to be later released to European Union customers during the high-demand season.

Ukraine currently has a record volume of natural gas stored in its underground gas storage facilities due to weaker demand in Europe. Traders have been actively using the Ukrainian facilities for gas storage.

Ukraine, which operates some of the largest underground gas storage facilities in the world, is capable of holding up to 31 Bcm of gas.

The memorandum also called for the construction of the pipeline link between Polish Hermanowitze and Bilche-Volytske underground gas storage facility in Ukraine, one of the largest such facilities in Ukraine.

The Ukrainian section of the pipeline link is currently capable of handling 6.5 Bcm/year of gas, while the Polish section of the link is currently capable of handling 2 Bcm/year of gas and requires additional investment to increase capacity. (rt/tl/ez)