OREANDA-NEWS. December 03, 2014. Ukraine’s Prime Minister Arseniy Yatsenyuk and President of the European Investment Bank Werner Hoyer have signed a finance contract between Ukraine and the European Investment Bank on the implementation of a project for the reconstruction, overhaul and re-equipment of the Urengoi-Pomary-Uzhgorod gas pipeline.

Following the signing ceremony, Arseniy Yatsenyuk has briefed that the total amount of the loan from the European Investment Bank for the pipeline’s reconstruction is EUR 150 million. The European Bank for Reconstruction and Development could provide up to USD200 million.

According to the Prime Minister of Ukraine, the project is designed for four years, the term of repayment - 19 years.

The project involves the complete replacement of 120 km of pipes as well as the modernization of two compressor stations: "There will be a new pipe there that will enable us to buy it on a competitive basis and, I hope, from a Ukrainian producer. This will additionally contribute to the Ukrainian economy."

PJSC Ukrtransgaz will implement this project. Today, Ukrtransgaz’s President Ihor Prokopiv has signed an appropriate project agreement with the EIB.

Moreover, the PM underlined that during the reconstruction of gas compressor stations gas pumping expenses via the Ukrainian GTS on this section would be decreased by 20%.

According to the PM, the project is economically justified and has three objectives: "First, to reduce technological gas consumption by 20%. Second, to increase energy efficiency and security of the Ukrainian gas transportation system. Third, to reduce gas leak."

The Prime Minister of Ukraine has also said that Ukraine and the European Investment Bank have joint projects for the amount of about EUR 3 billion, "This will enable the Ukrainian economy to develop. Private investors aren’t going to invest in Ukraine, because of relatively high risks. Therefore, we rely primarily on the European Investment Bank, the European Bank for Reconstruction and Development and other international financial institutions that are able to provide investment resources, loan and enable Ukraine to implement infrastructure projects."

In the context of the EU's energy security, Arseniy Yatsenyuk has welcomed the results of the recent elections in Bulgaria and Moldova: "I congratulate our Moldovan colleagues on forming a pro-European majority. We see that in Bulgaria also won the pro-European party of former Prime Minister Boyko Borisov. This will enable us to work together on energy security of the European Union."

"I hope that Ukraine won't be bypassed through South Stream. South Stream is an unnecessary political project of Russia," the Prime Minister said.

He has stressed that Ukraine once again calls on European and American partners to invest in the Ukrainian gas transportation system, "We began its reconstruction with the European Investment Bank. Therefore, this should be our common approach to ensuring the energy security of both Europe and Ukraine via participation of European and American companies in the Ukrainian gas transportation system."