Ukraine: Trilateral Deal with EU, Russia Only Way to Avoid Gas War

Creating a consortium with Russia and the European Union is the only way to solve the "gas dispute" between Moscow and Kiev, according to Ukrainian Prime Minister Nikolay Azarov.

"The proposal to create a tripartite gas consortium ... that was drafted by the government of [the current Ukrainian President Viktor] Yanukovych in 2004 is the only option," Azarov said at a press conference on Friday, as cited by RIA Novosti.

Russia and Ukraine are in an all-out dispute over the price and volume of Russian gas purchased by Ukraine. Kiev insists the current price is too high, while Moscow is pushing for control of Ukraine's system of gas transit to Europe.

Both parties have said lately that they see a consortium to manage the Ukrainian gas transit system as a possible solution to the problem but have not agreed on the project's format.

Azarov said new gas pipelines being constructed by Russia would render the Ukrainian gas transit system unprofitable due to its high upkeep costs. Two major Russian projects, the semi-completed Nord Stream and the South Stream, still at a planning stage, would both bypass Ukraine.

"The country is losing money on the maintenance of this system, this monstrosity built a long time ago to transport 150 billion cubic meters of gas to Europe," Azarov said.

"We have the gas transit system without the gas' owner, Russia, and without the buyers for the gas. We'll never reach any agreement or get long-term guarantees for our gas transit system [that way]," he added.

Copyright 2011, Novinite. All rights reserved.

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