Thursday, April 30, 2009

Ukraine Allows Gazprom to Upgrade Its Gas Pipelines

[Photo Credit: Ukrainian Prime Minister Yulia Tymoshenko and Russian Prime Minister Vladimir Putin at the joint press conference. Moscow, April 29, 2009. Photo courtesy of the Cabinet Press Office/ForUm (]

On Wednesday, April 29, the Ukrainian Prime Minister Yulia Tymoshenko paid a one-day visit to Moscow to attend the meeting of the Russian-Ukrainian intergovernmental Economic Cooperation Committee and to meet with her counterpart, the Russian Prime Minister Vladimir Putin. As expected, gas transit issues topped the agenda of Tymoshenko's brief but productive visit, which produced a number of important results.

Chief among them is Moscow's pledge not to fine Ukraine for failing to purchase 40 billion cubic meters of gas from Russia in 2009 in accordance with the bilateral contracts signed on January 19. The relevant provisions of those contracts stipulate that Ukraine is obliged to pay for the aforementioned amount even if Kyiv decides not to purchase all of it. However, the global economic downturn forced Ukraine to scale down its gas consumption thereby violating its contractual obligations vis-à-vis Russia's Gazprom in the first quarter of 2009.

In exchange, Tymoshenko invited Russia to participate in the EU-led overhaul of Ukraine's gas transportation system. It should be recalled here that the EU-Ukraine declaration on the modernization of Ukrainian gas transit system, which was signed in March, stung Moscow because it excluded Russia. During the joint press conference with Putin, which followed the six-hour talks, Tymoshenko stated, "I think everyone understands that it is impossible to modernize the gas transport system without Russia's participation. We have invited Russia to be a key player in the modernization of our gas transport system."

Ukraine's two other relatively less important concessions to Russia ought to be mentioned as well. Tymoshenko expressed Ukraine's commitment to assisting Russia with its accession to the World Trade Organization. In addition, she assured Moscow that Ukraine does not supply Georgia with weapons and does not intend to do so in the foreseeable future. In the aftermath of the Russia-Georgia war of August 2008, the issue of Ukrainian weapons deliveries to Georgia has been a major irritant in bilateral relations.

The Ukrainian experts praised Tymoshenko's visit to Moscow. Jamestown analyst and Ukraine expert Roman Kupchinsky told the Jamestown Foundation Blog that it must be made clear that Tymoshenko did not give Russia any ownership rights over the Ukrainian gas transport system. The decision to grant Gazprom the right to participate in the modernization of Ukrainian gas transport system Kupchinsky interprets both as a pragmatic step in placating Russia and a reasonable measure to lower the overcharged rhetoric in the area of Ukrainian-Russian energy relations.