Pipeline to bypass Ukraine

An agreement has been signed with Ukraine this year for the pumping of 105 billion cubic meters. Ukraine receives in payment for the transit of Russian gas to Europe an additional 30 billion cubic meters of gas. Ukraine itself imposes the tariffs and does so without regard for the world level of prices. According to the Ukrainian calculations, receipts from the transit of Russian gas amount to about $2.5 a year. For many years Gazprom supplied Ukraine with gas virtually on credit terms. Ukraine would not pay for the supplies and, moreover, would not recognize its responsibility for the debts. Late last year Ukraine acknowledged its debt as a state debt. Even so, construction of a gas pipeline in circumvention of Ukrainian territory is still on the cards because Russia cannot afford to be hostage to one export direction. In that sense Russia has found support from Western importers, which compels Ukraine to take account of the fact that not all gas will go through its territory. Construction is already underway, and it involves major companies, including Western companies. Europe has a stake in seeing Russia exporting gas unimpeded.