Thursday, June 22, 2006

Gas on the front burner again..

It looks as if the Orange coalition is back in business. Even though Yuliya Tymoshenko has not formally been appointed PM, she has immediately commented on the most important matter in hand - gas.

"Kyiv, June 22 (Interfax-Ukraine) - BYuT Leader Yulia Tymoshenko will insist on the revision of all agreements on gas supplies to Ukraine if she becomes premier. "All issues relating to supplies of natural gas to Ukraine require a more thorough revision and correction today, and certainly, all new contracts with Russia and Turkmenistan need to be built on a friendly basis," Tymoshenko told journalists on Thursday in reply to a question from Interfax-Ukraine."

Addressing parliament Tuesday, she warned that for the first time, the vast gas reservoirs located on Ukrainian territory are empty, and the current chaos in the gas sphere could lead to the collapse of the country.

Tymoshenko is deeply hostile to the complex deal reached with Russia whereby Ukraine purchases large quantities of vital Russian and Turkmen gas. The deal involves opaque intermediary companies which skim-off billions of dollars for the benefit of ruling elites both in Russia and Ukraine, to the detriment of the citizens in both countries.

In 2005 Tymoshenko's 'second-in-command' and Ukraine's security services chief Oleksandr Turchynov, was getting close to uncovering involvement of some of Mr. Yushchenko's associates in massive fraud in the Ukraine's gas procurement. These frauds originated from the days of President Kuchma and were not dealt with when Yushchenko became President, as promised during the Orange election campaign during Autumn 2004. This was a major reason for Yushchenko dismissing Tymoshenko and her government last September.

After the EU/US SUMMIT June 21, in Vienna attended by George Bush, EU Commission President Jose Barroso, Javier Solana et. al. its final declaration included the following:

"Ukraine has made remarkable progress in democratic and economic reforms. Building on the March 2006 elections, we will support Ukraine’s development as a democratic, prosperous and secure country. We will help Ukraine pursue economic reforms, combat corruption and reform the energy sector."

EU observers at Russian/Ukrainian gas negotiations would be useful for all parties, because vital pipelines which pass through Ukraine supply 25% of Europe' total natural gas requirements, and 80% of Russia's gas exports to Europe pass through Ukraine. It would be in Ukraine's interest to 'start the ball rolling' before the G8 summit in July, where the reliability of Russia as a supplier of hydrocarbon fuels will be a dominant topic.

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