Ukraine is making every possible effort to halt implementation of the "South Stream" gas project. Despite sworn friendship with the Kremlin, Kiev realizes that at the moment Russian gas will run through the Black Sea, by-passing Ukrainian territory, and hard times will begin for its economy. In parallel with this, the Ukrainian authorities are looking for alternative gas supply routes. Kiev is currently holding negotiations with Russia on re-establishing Turkmen gas supplies. Moreover, a new gas project of Azerbaijan, Georgia and Bulgaria delivering liquefied gas via the Black Sea has greatly interested Ukraine.
Ukraine announced its intention to join the new transportation route. According to the Energy Minister, Julia Boiko, Ukraine is ready to buy 10 billion cubic meters of Azerbaijani gas annually. The only obstacle to Ukraine participating in the project may become financial issues. The construction of liquefied gas storage facilities will cost Ukraine more than $1 billion. However, according to Boiko, investments in such facilities pay off really fast.
Ukrainian specialists have already paid a visit to Baku in order to hold talks on details of Ukraine's participation in the project. Minister Boiko announced that Ukraine is going to import 5 billion cubic meters of gas via gas storage in Odessa during the first phase and 5 more during the second.
Azerbaijan has nothing against cooperation with Ukraine, as both countries have close and friendly relations. Moreover, current president Yanukovich, already well known by his Azerbaijani partners, recently strengthened warm feelings between the states through his pragmatic and economically-wise attitude. The Baku authorities never welcomed the political games of ex-president Yushchenko's team, and at every given opportunity the Azerbaijani authorities demonstrated their independence and disagreement with the radical views of the Ukrainian "Orange revolution leaders". Yanukovich is a political leader of a different sort. Azerbaijan is now free from steering a political course between Moscow and Kiev and without doubt this situation creates favourable conditions for Azerbaijani economic expansion into Ukraine.
The Azerbaijani State Oil Company (SOCAR) has already bought 30 gas stations in Ukraine and oil storage in Odessa. It is also interested in purchasing the Kremchuk oil refinery of the Ukrgasnafta Company. There are serious reasons for these steps, as SOCAR aims at vertically strengthening the company and direct oil and gas supplies to Ukraine via its own retail chain.
According to the head of the Azerbaijani economic mission to Ukraine, economic cooperation between the states is gathering pace. This year, trade turnover may exceed $1.5 billion. He also confirmed the information that SOCAR is investing in the development of Ukrainian oil and gas facilities.
Evgenii Krishtalev. Exclusively for VK.
