South Stream a Result of Ukraine’s Nearsighted Policy – Ministry

KYIV. June 27 (Interfax) – A declaration on building South Stream, a radical new route for transporting natural gas from Russia to Europe bypassing traditional transit countries is a logical result of Ukraine’s nearsighted policy, the Ukrainian Fuel and Energy Ministry told Interfax.

Ukraine lost initiative in new gas transit projects in 2005 and the first half of 2006, a ministry source said.

A number of remarks and steps by certain Ukrainian political groups and officials have also been harmful to confidence building between Ukraine and Russia, he said.

Naftogaz Ukraine spokesman Oleksiy Fedorov also suggested that the plans to build pipelines for transporting gas from Russia to Europe bypassing Ukraine is a result of inefficient management of the Ukrainian oil and gas sector in the past several years.

“Ukraine is now reaping the fruit of the poor management of its oil and gas sector in 2005 and the first half of 2006, when partnership between Naftogaz and Gazprom was ruined. This has resulted in the emergence of plans to bypass transit routes, such as the Burgas-Alexandroupolis and South Stream projects,” he said.

Russia and Italy announced their plans to build the new pipeline to deliver Russian gas to Europe on June 23.

It was earlier planned that Russian gas would be transported to southern Europe through extending the existing Russian-Turkish gas pipeline Blue Stream to Istanbul by land and then to Greece and other southern European countries by sea.

The new plan envisions the construction of a gas pipeline to run through the Black Sea from the Beregovaya compressor station near Dzhubga in the Krasnodar territory toward the area of Varna in Bulgaria.

The next phase of extending this pipeline might involve the construction of either a land pipe section to Greece and Albania and an underwater section to southern Italy, or to Central Europe through Romania and Hungary through Baumgarten, a major gas hub in Austria. The northern and southern sections of the pipe may be built to complement each other.

South Stream construction could start in 2008 or 2009.

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