Ukraine Needs To Modernize Pipeline Systems

July 2010 Vol. 237 No. 7

Ukrainian pipelines serve as critical systems for the transit of natural gas and ammonia from Russia and Central Asia to the European Union.

Due to continuing financial difficulties of Ukrainian pipeline operators, these pipelines are in need of modernization and environmental remediation.

The government of Ukraine and Ukrainian pipeline operators are talking with U.S., European and Russian organizations about potential pipeline modernization projects. Options could include long-term concession agreements in return for outside investment. Washington is encouraging Ukraine to make these possible pipeline projects available for international investment through an international tender process. 

Ukraine sources estimate a need for $5-7 billion in pipeline modernization in the next five- seven years. The European Commission has pledged technical assistance and financial support for the modernization. About $300 million in carbon credit-related finance is available for projected emissions reductions involved in system modernization.