OREANDA-NEWS. May 18, 2012. A construction of South Stream is economically disadvantageous as for Ukraine as well as Russia. The Prime Minister of Ukraine Mykola Azarov disclosed this during a conference "Ukraine and the EU - what kind of future is?" which took place at the European Parliament in Brussels.

He said to build South Stream, Russia is spending 50 billion Euros, while the modernization of Ukrainian gas transport system needs 1.5 billion Euros.

"Through the Ukraine’s territory passes three pipelines that can deliver 150 billion cu. gas to Europe. And if carries out modernization of our gas transportation system, valued to 1.5 billion Euros, we will be able to supply 200 billion cu. gas to Europe that is to completely cover the gas needs for Europe. However, Russia plans to build the South Stream. So, Russia for its part wants to completely abandon the transit services Ukraine provides. And we are forced to completely get rid of gas supplies from Russia. Is it not absurd situation, especially given the instability in world markets?" Mykola Azarov declared.

At this he stressed that due to onerous gas contracts 2009, Ukraine forced to buy Russian natural gas at the highest prices in Europe. PM recalled that overpayment for Russian gas exceeds the annual state expenditures on medicine. Therefore, he noted, Ukraine has to minimize the consumption of energy resources, increase domestic production of hydrocarbons, and seek alternative sources of energy, as well as to switch its power units from gas to coal.

Prime Minister emphasized that for these needs are being directed considerable financial resources that could have be guided to solving other social issues. "In terms of volatility in global financial markets it would have been better to send the money to modernize our industry, structural reforms and more. But in Russia there are lots of problems to which could have been send huge amounts of money that are being invested in the South Stream construction. We sincerely determined to good relations with Russia, to mutually beneficial partnership," said Mykola Azarov.