05.02.03

Ukraine, Russia, Germany put off talks on gas consortium

A meeting of Russian, German and Ukrainian business people and officials on the establishment of an international consortium to manage the Ukrainian gas pipeline system, planned for February 3-4, has been postponed at the initiative of the Ukrainian side.

The German Embassy in Kyiv announced on Monday that Germany had underscored its interest in the project and proposed negotiating a new date for the meeting shortly. The dialogue will therefore be continued, German diplomats said.

It is planned that participating from the German side will be State Secretary at the Economics and Labor Ministry Dr. Axel Gerlach and Ruhrgas CEO Burckhard Bergmann. They were ready to meet on February 3-4, the embassy said.

Russia and Ukraine have set up an international consortium to manage and develop the Ukrainian gas transport network, with equal participation. Gazprom and Naftohaz Ukrayiny signed the founding documents at the start of November 2002.

Ukrainian President Leonid Kuchma announced at the end of January that Germany should become a partner in setting up this consortium.

He said that there has been major progress in the issue of setting up a consortium and at the moment Naftohaz Ukrayiny and Gazprom practically have a base from which to work. "There is a schedule according to which we should complete legal issues, but the skeleton of the system already exists," he said.

The consortium is registered in Kyiv and at the initial stage Gazprom and Naftohaz Ukrayiny have contributed $500,000 to the consortium's charter capital.

The business model for the consortium should be submitted for consideration by the governments of both countries no later than August 30, 2003.

The consortium on mutually profitable conditions will ensure transportation of gas and also the reliability, safety and stability of the Ukrainian gas transport system.

The consortium will carry out work to increase gas transit volumes through Ukrainian territory.