Russia, Ukraine start evaluation of energy assets: Gazprom

Russian and Ukrainian energy firms have begun evaluating assets that will make up the backbone of a future joint venture, the first possible step towards a full merger, Gazprom said on Wednesday.

“The sides agreed to begin the evaluation of the assets which can be included in the joint venture,” Gazprom said following talks in Moscow between Gazprom chief executive Alexei Miller and Ukrainian Fuel and Energy Minister Yury Boiko.

It did not provide further details.

In April, Russian Prime Minister Vladimir Putin caught Ukraine’s leaders off guard by proposing a merger between Gazprom, the world’s largest gas firm, and Ukraine’s gas company Naftogaz.

Despite rapidly warming ties, Ukraine has so far managed to hold the line, insisting that any merger with Gazprom should be implemented on equal terms.

Ukrainian officials have however said that a joint venture between the two energy companies is a possibility. Gazprom has proposed a 50-50 joint venture with Naftogaz, calling it a possible first step toward the merger of the two companies.

“The creation of a joint venture is a necessary and absolutely logical step in the business of developing cooperation between the companies,” Gazprom head Miller said in a statement.

Russia has long said it wants a stake in Ukraine’s prized Soviet-era pipeline network while Ukraine wants a joint Russian-EU consortium to be set up to help modernise the system.

In a possible jab at the European Union, Miller said the future bilateral joint venture would be more efficient that the proposed consortium.

“Unlike the multilateral consortium, about which ineffective talks have gone on for many years, our joint venture will become a real instrument of conducting business,” Miller said.

Ukraine was quick to stress that the joint venture with Russia would not undercut its national interests.

“All the projects, which we begin today, are useful for our state, they all, as per instructions from our president, are conducted only on a parity basis, only taking into account our national interests,” Boiko was quoted as saying by the Ukrainian fuel and energy ministry.