Ukraine, Croatia to sign memorandum on Adriatic Gas Corridor Nov. 5

Ukrainian Prime Minister Mykola Azarov and his Croatia counterpart Zoran Milanovic on Tuesday will sign a memorandum on the establishment of an Adriatic Gas Corridor, which will connect Ukraine, Hungary and Croatia.

Azarov announced this during a meeting with U.S. Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland in Kyiv on Monday.

"Tomorrow the Prime Minister of Croatia will pay an official visit to Ukraine, and we intend to sign a memorandum, under which an LNG terminal and pipeline will be built on the Adriatic coast," he said.

The prime minister recalled that in the last three years because of the gas contracts of 2009 Ukraine overpaid Russia $20 billion, and therefore is forced to pursue a policy of diversification of energy supplies, production of hydrocarbons from unconventional sources, and transfer its energy to coal.

"We have set a goal to significantly reduce our dependence on gas supplies from Russia. And therefore a number of measures have been taken that enabled us to halve Russian gas consumption. Also, we have taken steps to increase the volume of own gas. Specifically, we held talks with major companies - Shell, ExxonMobil, Chevron. With all of these companies we have already prepared the relevant agreements. We have carefully studied the experience of the U.S. on shale gas production, and we expect that oil shale deposits in the future will allow us to produce 10 to 20 billion cubic meters of gas," Azarov said.

The sides also discussed the European aspirations of Ukraine. In particular, Nuland said that U.S. companies are interested in signing the Association Agreement, because after that they will be able to increase their products in Ukraine and sell them duty-free to the EU.

"The EU will not sign the agreement only because they are "good guys”. They are interested in access to their market of good quality goods, workforce, innovations at their enterprises. Our companies also want to see the Association Agreement and the agreement with the IMF because they will be able to produce more here and then sell it to Europe," Nuland said.

Adapted from Ukrinform