Ukraine considers Kazakh gas transit options

KIEV, Ukraine, July 17 (UPI) -- Trade agreements with Kazakhstan may include the possibility of receiving natural gas shipments sent through the country, Ukraine's government said.

The Ukrainian government said Friday it was working to develop trade and economic deals with Kazakhstan. Arrangements were drafted during bilateral economic sessions attended by deputy ministers on both sides.

Kiev said the terms of the agreement call on representatives from each country to examine the potential for energy cooperation.

"The participants of the meeting also agreed to study the issue of supply to Ukraine of Kazakhstan natural gas and transit through the territory of Kazakhstan of Turkmen and Uzbek natural gas," the Ukrainian government said in a statement.

An April report from the International Energy Agency said a more liberalized energy sector in Eastern Europe and Central Asia is necessary for regional energy security. While countries like Azerbaijan and Kazakhstan are emerging as oil and gas powerhouses, their reserves are under "rigid" and mostly government control, the report said.

The European market relies in part on Russian natural reserves and many of those reserves run through Eastern European markets, where crises like Ukraine's expose vulnerabilities. Apart from Norway, the European community has looked outside of the region for a diverse source of energy.

Ukrainian energy company Naftogaz in early July said it would stop purchasing gas from Russia until new contracts are brokered, though supplies to the European market would continue. Gas purchases from Russia are already down by more than 50 percent.

The Ukrainian government offered no statements on the next steps for Kazakh energy cooperation.