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26.12.2011 | kyivweekly.com.ua

Ukraine energy system under threat

Ukraine could lose its natural gas system, making it a cold, expensive winter for average Ukrainians and Europeans alike. A secret draft agreement in the works with Russia foresees Ukraine giving up control of its gas pipelines and underground gas storage facilities along with jeopardizing European integration, warned one Ukrainian newspaper. Sources claim that the deal would involve European countries friendly to Russian gas companies ganging up with Russian interests to assume controlling shares of Ukraine´s gas transit and valuable storage systems. This deal could see Ukrainians paying European prices for gas and price hikes on all domestic services and commodities. It would cause a complete crash of the Ukrainian economy already teetering on the brink of collapse after two global economic recessions and government mismanagement. Since the USSR´s fall and the rise of Russian oil and gas oligarchs, Ukraine´s energy system has been targeted for takeover. Most Ukrainian presidents and parliaments have resisted foreign ownership of its energy system, but things have changed. After the jailing of ex-PM Tymoshenko over a dodgy gas deal with Russia, current PM Azarov is in an awkward place if he agrees to this arrangement. He would hardly like to take the blame for what the press calls "surrendering the Ukrainian gas transport system." In fact, he has argued against it. He could even be setting himself up to follow Tymoshenko behind bars if this agreement proves ruinous. And it will - for generations to come. Moreover, control of Ukraine´s gas system has wider implications for Europe. Some local analysts argue that this deal is nothing more than Russia using Ukraine as a third party to take control of the European energy system. This threat to Europe was hinted at in the past, with Russia regularly cutting off Ukrainian gas supplies, thereby affecting Western Europe. The EU was hoping to spread its energy standards eastward, bringing more countries into the EU energy zone, while Russia would like to keep vital energy countries like Ukraine and Azerbaijan in their sphere of influence. Ukraine has already sold itself out to foreign influences. It would be best for it to hang on to its remaining energy structures.

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