MOSCOW Russian gas giant Gazprom said on Wednesday it had signed a deal with European partners to create a new export channel bypassing Ukraine that will allow for increased supplies to energy-hungry Western customers.
Gazprom Chief Executive Rem Vyakhirev said an agreement had been reached with Germany's Ruhrgas and Wintershall, French Gaz de France and Italy's Snam.
"Our French, German and Italian colleagues and ourselves have signed an agreement which will permit an increase in gas supplies to the European Union," he told reporters.
A formal announcement was expected to be made on Thursday.
A Gazprom spokesman told Reuters that the companies had signed a memorandum of intent to set up a consortium to build a new gas pipeline, but he could give no details. Vyakhirev made no mention of the consortium.
A senior Gazprom source said the consortium, which will be 100 percent owned by its founding companies, will organize the financing of the project, which could cost as much as $2 billion, and deal with all other technical and economic issues.
The consortium's 600-km (373 mile) pipeline, with a maximum capacity of 60 billion cubic meters (bcm) of gas per year, could have two lines and would run through Belarus, Poland and Slovakia, bypassing Ukraine.
"The pipeline aims to supply supplementary volumes of natural gas to cover contracts which already exist between Gazprom and its main European gas consumers," the source said.
Gazprom Wants Alternative to Ukraine Gaz de France president and Ceo Pierre Gadonneix told reporters the project would take two to three years to implement but did not say when the process would begin.
He also said the distribution of shares within the consortium was not decided.
"It is obvious that all countries which receive gas from Russia will be partners with Gazprom ... the countries which are crossed by the pipeline should also be partners," he said.
Slovakia has expressed support for the pipeline, but Poland has opposed it, claiming it would hurt the interests of neighboring Ukraine.
When asked if Poland had given permission for the pipeline to cross its territory, Gadonneix said: "It's an issue between Gazprom and Poland." Gazprom accuses Ukraine of pilfering gas from the existing pipeline crossing its territory, through which Gazprom supplies around 90 percent of its 120 bcm per year exports to Europe.
In addition, Ukraine owes Russia around $2 billion for gas supplies.
On Tuesday, Russia and Ukraine reached a debt settlement agreement, and Russia also agreed to allow 35 bcm of Turkmen gas to be transported through its territory to Ukraine until the end of 2001.
Gazprom Deputy Ceo Pyotr Rodionov was quoted as saying on Tuesday that the agreement between Russia and Ukraine would not deter Gazprom from pursuing its plan to build a bypass.
(Reuter)