KIEV, Ukraine, Aug. 5 (UPI) -- Updating gas transit networks in Ukraine would be cheaper for Russian than building the South Stream gas pipeline, the Ukrainian prime minister said.
Russian gas company Gazprom cut gas supplies to Ukraine in early 2009 because of contract and debt disputes.
Ukrainian gas transit systems transport 80 percent of the Russian gas for European countries. Kiev is facing pressure to update the Soviet-era network as it struggles to repair its reputation as a transit country.
Ukrainian Prime Minister Mykola Azarov said updates to the transit network would be cheaper than building a new pipeline for Europe.
"As for the South Stream project, we have an alternative that we will offer to our Russian partners," he was quoted by Russia's state-run news agency RIA Novosti as saying. "The issue is about modernizing our southern gas pipelines, which will raise their capacity to the one planned for South Stream."
South Stream is designed to carry as much as 2.2 trillion cubic feet of natural gas each year through the Balkans to southern Europe. The price tag could run as high as $25 billion.
Azarov said upgrades to the Ukrainian gas transit system could cost $1 billion.
