Ukraine Open to Joining Trans-Anatolian Gas Pipeline

KYIV, Ukraine, May 8, 2012 /PRNewswire/ --

Ukraine is ready to participate in the construction of the Trans-Anatolian gas pipeline from Azerbaijan through Turkey to Europe. Ukraine wants to "both make a financial contribution and provide pipes and compressor stations," said Ukrainian Prime Minister Mykola Azarov during the meeting with Turkish Deputy Prime Minister Ali Babacan.

The Trans Anatolian gas pipeline project (also known as Trans Anadolu, or TANAP) was announced in November of 2011. In December 2011 Turkey agreed with Azerbaijan to take the 2,000 kilometer pipeline from the largest natural gas field in Azerbaijan - Shah Deniz-II - through Georgia to Turkey and then to Europe. According to Georgian expert Neil Dunn, the main strategic choice for TANAP is whether to direct gas to the Balkans and Italy or send it to Central Europe.

It is projected that TANAP would transport up to 30 billion cubic meters of gas per year (16 billion in the initial stage). Turkey plans to buy 6 billion for domestic needs, while the rest would head to Europe. Reportedly, the price of the construction may reach USD 5-7 billion. The new pipeline will open in 2017.

Ukraine's move is not the first attempt to diversify the country's gas imports. Dependent on Russian gas, the country strives to find new sources of domestic gas production and foreign supply.

As part of these efforts, Ukrainian government is negotiating an agreement with Azerbaijan. The deal stipulates the supply of 10 to 15 billion cubic meters of Azeri gas per year. The gas will be supplied through LNG terminal, to be launched in 2014. Its capacity is planned at 10 billion cubic meters.

Additionally, Ukraine envisages the reverse use of the existing pipelines in order to import gas to Ukraine from the EU, according to Ukraine's Minister of Economic Development and Trade Petro Poroshenko. Ukrainian state oil and gas company Naftogaz, reportedly, plans to contract with the German company RWE, providing for the supply of spot gas purchased in Europe via Slovakian pipelines.