Ukraine and Iran Develop Gas Cooperation

Ukraine and Iran have made an agreement to strengthen their cooperation in a number of economic areas, including in the energy sector, a move that Ukraine says will intensify relations in 2016. 

The 28-page document, which was signed at the Fifth Tehran-Kiev Joint Economic Commission by Iran's Minister of Agriculture, Jihad Mahmoud Hojjati, and Ukraine's Deputy Prime Minister, Gennady Zobkov, will see the two countries cooperate on agriculture, investment, oil, gas, energy and banking ties, according to Iran's state-owned press agency, Irna, on March 7.

In its own statement after the signing, Ukraine's government heralded the signing as a resumption of cooperation that was halted as a result of the sanctions imposed on Iran by the West. 

"The [joint commission] is happening today, after a long pause in the cooperation between our countries," Zubko said. "We view this as an opportunity to resume the dialogue on all relevant issues of mutually beneficial cooperation in the interests of the peoples of our countries." 

Further to the signing, the two countries also discussed avenues to expand their cooperation in a number of gas-related areas. 

Most importantly for Iran, which has been working to figure out ways to enter the European gas market, is the potential for Iran to transit its gas to Europe through Ukraine.

According to Irna, Ukraine's Minister for Energy and the Coal Industry, Vladimir Demchishin, said on Monday that his country can transit Iranian oil and gas to Europe. Currently, Ukraine trades 7mn barrels of oil (boe) and oil products and 20 bn m3 of gas annually, the minister said.

The two sides also discussed Ukraine's manufacturing of turbines and gas compressors, with Iran's Minister of Petroleum Bijan Zanganeh saying that Iran supported Ukraine’s presence in the oil and gas industry and its cooperation in that manufacturing.

He stressed identification of Tehran-Kiev cooperation opportunities and said that in order to be successful in Iran’s oil industry projects, Ukrainian companies need to totally finance the operation by the banks in their country.

Zanganeh also highlighted the potential for Ukraine to cooperate in its investment projects, including the petrochemicals sector, but stressed that interested Ukrainian companies would need to totally finance their investments with funding from Ukrainian banks. 

“The oil and gas industry’s upstream sector is also in need of investment to the tune of $130bn dollars which has to be supplied by the resources overseas because we cannot provide from our current revenues," he said. 

 

Erica Mills

 


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