Modernization of Ukrainian gas transport system is more profitable than all Moscow's new gas pipelines - expert

Despite the numerous projects of new pipelines for Russian gas supplies to Europe, offered by Moscow, the only economically feasible and the least expensive solution is to modernize the existing Ukrainian gas transportation system (GTS).

Such an estimate was expressed by renowned international expert and a senior fellow in the Energy and National Security Program at the Center for Strategic and International Studies (USA), Edward Chow in Washington on Wednesday, an Ukrinform correspondent reports.

"The price of $20 billion to modernize the Ukrainian gas transport system [voiced by Russia's OAO Gazprom] is very inflated," said the expert, commenting on Moscow's desire to bypass the Ukrainian gas supply line.

Therefore, he continued, it explains further rhetorics of Russia: "If it's worth $20 billion, we can build the South Stream or the Turkish Stream for this money. So, why do we need to spend the same amount for Ukraine to remain the main transit country?"

Chow stressed that, in fact, the modernization of the Ukrainian GTS costs much less money. In addition, he said, the Ukrainian gas storage facilities located in the west of the country play "a very important strategic role."

The expert noted that the Russian gas monopoly, Gazprom, must demonstrate flexibility to survive amidst current fall in world energy prices. And it already showed that in past three years.

"We have seen the concessions they made in contract pricing, in 'take or pay' terms, in terms of restrictions on regional supplies," Chow gave examples.

Besides, he said, a presumption that "the Russians are ready to negotiate on a new gas transportation agreement with Ukraine is also saying something."

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