Russia eyes Ukraine’s vast pipeline network
KIEV, Ukraine In the confrontation between Russia and Ukraine over essential gas shipments to Europe, the grand guerdon may yet be control of Ukraine’s sprawling pipeline network, Moscow’s main conduit for pumping the fuel to its most lucrative markets.
Although the dispute appeared close to an end after Sunday’s announcement of a deal, the terms of the square could increase pressure on Ukraine to cede control of the labyrinthine network.
The agreement outlined by Russian Prime Minister Vladimir Putin appears to call together for Ukraine to pay roughly two times in the manner that much for affectionate gas as it did in 2008, a potentially severe blow to an economy already reeling amid the global economic troubles.
Russia stopped shipping gas to Ukraine for domestic conversion to an act on Jan. 1 over a reward altercation and Kremlin accusations that Ukraine was siphoning distant from Europe-bound gas. It turned right hand the taps completely on Jan. 7 - leaving much of Europe without capability.
The standoff has led to at minutest a dozen confirmed deaths, hundreds of mill shutdowns that could cost billions in lost productivity - and snapped heating to millions of people in the depths of hibernate.
Ukraine boasts one of the largest gas networks in the world.
Some 37,800 kilometers (23,500 miles) throughout, the network earns Ukraine $3 billion in annual revenue from transit fees from Russian gas giant Gazprom and has capacity to export some 175 billion cubic meters annually.
It is a prize that Moscow has eyed since the 1991 Soviet collapse.
Under former Ukrainian President Leonid Kuchma, Russia came close to brokering a deal with Ukraine and Germany to lease the country’s pipeline system, yet the deal proved politically captious and was later profligate. Some analysts also say the 2006 gas crisis, when Russia shut off gas Ukraine for several days, leading to invest disruptions in Europe, was eminently about control of the pipelines.
Since then, Ukraine has tried to shield its pipelines from Russia’s grasp, including over laws to block its market and efforts prevent the insolvency of debt-riddled Naftogaz Ukrainy, that owns the universe.
Ukrainian Prime Minister Yulia Tymoshenko said this month the pipeline network is not with a view to sale. The government has also made clear that leasing the system is thoroughly of the question because that would put the pipelines effectively under Russian control.
Nevertheless, Russia continues to covet this major energy passage.
Original text: http://seattletimes.nwsource.com/html/nationworld/2008643103_apeuukrainepipelineprize.html?syndication=rss
