OREANDA-NEWS. January 30, 2013. Ukrainian Prime Minister Mykola Azarov keeps under personal control a project for modernization of the domestic gas transportation system. He said this during a meeting with the German company Ferrostaal delegation.

"Thank you for your support of our position on upgrading the gas transportation system. Right now this is especially important for us, at a time when one side gas agreement with Russia acts", Mykola Azarov said.

The Prime Minister stressed that the modernization of the GTS, which Ukraine started with Deutsche Bank and Ferrostaal - a promising project, which will be supported by the Government.

"Modernization of our gas transportation system is extremely relevant. In this respect, implementation of the pilot project on the modernization of the equipment at the Bar booster station of the Soyuz pipeline and the Deutsche Bank’s participation in the project is important", Mykola Azarov stressed.

The PM recalled that the domestic GTS is reliable and cheap route for hydrocarbons to Europe. Ukraine also has underground gas storage facilities, which allow during peak winter loads to increase the supply and to ensure stable revenues of energy to Europe, he added.

Mykola Azarov also said that Ukraine is interested in natural gas supplies from Europe, which is now considerably cheaper than the Russian gas. According to him, Ukraine can receive gas from Europe on much better terms than from Russia: there are no requirement of "take or pay" in European contracts and there are no penalties for arrears of gas. The Prime Minister recalled that Ukraine has already had a positive experience for the purchase of natural gas in the EU.

Recall, December 11, 2012 the Affiliated Company Ukrtransgas and Deutsche Bank signed an agreement for a credit line of USD 53.5 million euros to modernize the Bar booster station of the Soyuz pipeline.

With the funds from the loan it will be extended the Bar station’s operation for 15 years, which will reduce by 28% the volume of natural gas and increase the efficiency of gas compressors.

The funds will be repaid at cost of cuts in spending of Affiliated Company Ukrtransgas for fuel gas. The crediting period is 10 years and 9 months from the date of transfer of sums. The German side plans to finance 85% of the project cost, and Affiliated Company Ukrtransgas - 15%.