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Kiev needs at least $3 billion for gas overhaul
by Daniel J. Graeber
Kiev, Ukraine (UPI) Apr 23, 2013


Serbia's gas operators under EU pressure
Brussels (UPI) Apr 23, 2013 - Serbian gas pipeline operators may be in violation of European laws regarding who controls what part of the energy sector, a European regulator said Wednesday.

The European Energy Secretariat said it was seeking a decision on whether or not Serbia was breaking energy laws in the European Union.

"The Secretariat has repeatedly expressed concerns that Serbia's two transmission system operators for natural gas, Srbijagas and Yugorosgas, do not comply with unbundling requirements," the regulator said in a statement.

Unbundling means companies are prohibited from controlling both production and distribution of natural gas.

The Energy Community Secretariat issued a similar complaint in February, which followed a meeting between Srbijagas and Russian energy company Gazprom to discuss the South Stream natural gas pipeline, a transit system that would run through the Black Sea to European consumers.

The secretariat said Wednesday it was frustrated with Serbia's "lack of an adequate response" and "the extensive delay" regarding its concerns. Under the February order, Serbia had two months to response to the secretariat's complaint.

More than $3 billion is needed to overhaul the Soviet-era natural gas transit network in Ukraine, Ukrainian Energy Minister Yuri Prodan said Wednesday.

European consumers rely on Russian energy company Gazprom for about a quarter of their annual gas needs, though the bulk of those supplies runs through Ukraine's pipeline network.

"In order for the gas transport system to operate normally, though it is working normally now, it needs modernizing, and I think that the first stage [will require] $3-$4 billion, that is what is needed to intensively invest in the modernization," Prodan said Wednesday.

Members of the European community have looked to alternative gas transit networks from the Caspian region to help break the Russian grip on the region's energy sector. Gazprom, for its part, aims to build South Stream, a pipeline that would avoid geopolitically sensitive territory in Ukraine.

Visiting U.S. Vice President Joe Biden offered Ukraine a new $50 million aid package to help support energy and economy developments.

Russian President Vladimir Putin warned European leaders the region's energy sector was at risk because of Ukraine's mounting gas debts.

Despite the concerns over Ukraine, the Gazprom board of directors said Tuesday the European market remains a "top priority."

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