Russia to Offer 1 Billion to Ukraine for Gas Transit

Russia's Gazprom would pay $1 billion up front to Ukraine for gas transit to finance Kiev's purchases of gas for storage and to secure shipments to Europe in the winter of 2013/14, Reuters wrote on Wednesday. 

According to a note released on Wednesday, Azarov wants Ukrainian underground gas storages and modernization of GTS to play a key role in strategic stability of European energy market. 

The European Union is interested in the development of a gas hub in Ukraine, Ukrainian Premier Mykola Azarov said at a cabinet meeting in Kyiv on Wednesday according to Kyiv Post.

Kiev is also keen to produce locally to ease Ukraine’s dependence on Russian gas. Ukraine continues to make ambitious plans to decrease national energy consumption, switch its power stations from natural gas to coal, build an LNG terminal, and open reverse flows of gas from Europe.

Gazprom ships more than half of its gas to Europe via Ukraine. This year it aims to increase exports to Europe, where it provides a quarter of gas needs, to 150 billion cubic metres from 138 bcm last year. The supply of Russian gas to Ukraine fell by 23.2% in January and February compared to the same period last year, according to a report released by the Ukrainian Energy and Coal Industry Ministry in April.