Ukraine Ready to Invest Up to EUR 790 Million into Trans-Caspian Gas Pipeline

Ukraine is ready to invest up to EUR 790 million into the trans-Caspian gas pipeline project.

The investment will be made under the condition that an offshoot to the Georgian oil port of Kulevi in the eastern coast of the Black Sea is built.

Kyiv plans to transport liquefied natural gas from Kulevi by tankers to south Ukrainian LNG Terminal Yuzhny, reported press office of the Prime Minister of Ukraine Mykola Azarov.

The new gas pipeline is supposed to go through the territory of Azerbaijan and Georgia, bypassing Russia.

During the meeting with the President of Azerbaijan Ilham Aliyev the Prime Minister of Ukraine Mykola Azarov expressed Kyiv’s intention to participate in construction of the trans-Caspian gas pipeline, reported press office of the Ukrainian prime minister.

The projected transporting capacity of the trans-Caspian gas pipeline is 30 billion cubic meters per annum. It will allow transferring gas from Turkmenistan to Nabucco – the alternative pipeline to the Russian South Stream. The latter is known to be lobbied by Gazprom. The overall cost of the trans-Caspian gas pipeline project is estimated at EUR 7.9 billion.

Russia was reported to be reluctant to the trans-Caspian gas pipeline project. Russia’s foreign ministry argued that Baku and Ashgabat had no right to build a pipeline without consent of all Caspian littoral states due to the undecided legal status of the Caspian Seabed. Azerbaijan insists that it can solve this problem by making a bilateral agreement with Turkmenistan.

Conveniently, Ukraine completed the feasibility study of the LNG terminal Yuzhny last week. As a result, the project worth EUR 846 million has been offered to foreign investors. The expected gas transfer capacity of the terminal is 10 billion cubic meters per year with the prospect of doubling its capacity later on. The design and construction phase of the project is estimated at 49 months.

Notably, in September 2011 the President of Ukraine Viktor Yanukovych offered Russia to run the South Stream gas pipeline through southern Ukraine. This could decrease its construction cost five times – from EUR 25 billion to EUR 5 billion. Currently, the pipeline is designed to go through the Turkey’s waters of the Black Sea.

[mappress]

LNG World News Staff, April 6, 2012