West asked to back CIS gas plan

WESTERN companies are being asked to back a plan to improve the reliability of the vital but increasingly uncertain gas supplies from the CIS to Western Europe.

Top managers from Kiev-based Vnipitransgaz (VTG), the design company that was largely responsible for the pipeline network in the old Soviet Union, have been visiting London to drum up interest in their scheme to boost gas storage facilities in Ukraine. They met British Gas, BP, Chevron - the construction arm of the Norwegian company Kvaerner - and several financial institutions.

VTG says that if all the worked-out gas reservoirs in Ukraine were filled with gas they would be able to hold enough to keep Western Europe supplied for a month.

This would provide an important cushion to companies that are becoming worried about the continuity of supplies from Russia, which satisfy 20 per cent of Western European demand.

In October the gas supply coming into the West was cut in half for a week, apparently because of a dispute between Russia and Ukraine over payments, and tension between the two countries has been growing since. Gas experts say this caused great anxiety in the industry which looks on Russia, with by far the biggest reserves in the world, as the main source of increased imports.

The Ukrainians say that if Western companies had control of storage facilities the political risk associated with Russian gas would be greatly reduced.