Russia and Ukraine sign oil transit deal

Russia and Ukraine sign oil transit deal

2010-11-27 00:51:15 GMT+7 (ICT)

MOSCOW, RUSSIA (BNO NEWS) -- Russia and Ukraine on Friday signed an agreement for regulating changes in oil transit fees for the transportation of Russian oil through Ukrainian territory.

Russian media said the agreement was signed by Russia's Deputy Energy Minister Anatoly Yankovsky and Ukrainian Energy Minister Sergei Boiko. The oil transit deal was initiated on October 27 and is likely to establish lower transit fees.

Negotiations began after Russian Energy Minister Sergei Shmatko reported that Ukraine improved its price guidelines for oil transport fees last month.

In January, Ukraine increased oil transit fees by 30 percent to between 6.6 and 3.9 euros per ton per 100 kilometers.

Last September, Ukraine and the European Union agreed on the reform of the Ukrainian energy sector that will modernize the gas transportation system, which pumps 141 billion cubic meters of gas to Europe each year.

Ukraine has previously discussed the modernization of its pipelines with Gazprom, the Russian energy giant, but the two sides could not reach an agreement.

Ukraine's gas pipeline system stretches over 37,500 kilometers (23,306 miles). It includes 71 booster stations and 13 underground gas storage units of 32 billion cubic meters capacity.

Russia is currently constructing the South Stream pipeline that will pump Russian gas to Europe under the Black Sea bypassing Ukraine. Officials have said that it would be cheaper to fund the gas transit system that constructing a new one.

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