Meeting on the Ukraine's gas transit system modernisation

Ukraine is a key transit country for oil and gas supplies from Russia to the EU and has expressed its wish to be integrated into the EU and South-Eastern European energy markets. Energy is a sector that will continue to be at the centre of EU-Ukraine relations and where co-operation will continue to grow substantially over the coming years. The gas transit system of Ukraine represents the backbone of gas supplies to Europe, accounting for 20% of the EU’s gas consumption and 80% of Russian gas exports to the EU, as well as carrying substantial quantities of Central Asian gas. Anticipating the importance of this transit system for the EU’s growing demand for imported gas, the European Commission’s programme of technical assistance, INOGATE, carried out a number of studies between 2003 and 2007, which concluded that investments of €2.5 billion for 2009-2015 are required to rehabilitate the system in order to keep it operating at current volumes. The importance of this issue was explicitly recognised in the Memorandum of Understanding on co-operation in the field of energy between the EU and Ukraine signed on 1st December 2005 by President José Manuel Barroso, the President of the European Council at the time, UK Prime Minister Tony Blair, and Ukrainian President Victor Yushenko. The Joint International Investment Conference on the Modernisation of Ukraine's Gas Transit System, to be held on 23rd March 2009 in Brussels, will provide an opportunity for all stakeholders to discuss the context in which the investments in Ukraine’s gas transit system will be made. The conference will be co-hosted by the European Commission and the Government of Ukraine and it will bring together over 200 representatives of the EU, Ukraine and third countries, as well international financial institutions and the private sector. In preparation for the Conference, the European Commission and the International Financial Institutions have identified a series of reforms that are necessary in Ukraine's gas sector to enhance its gas transit system stability, reliability and transparency and attract the necessary investment. These reforms include adopting the appropriate parts of the EU gas market acquis and ensuring independence of the Ukrainian gas transmission operator in terms of its legal form, organization, decision-making and accounts.