Ukraine pays Russia with pipeline for gas
Ukraine's state oil and gas company has agreed to pay off part of the countries huge gas debt to Russia by building a
$ 250 mm pipeline.
Naftogaz Ukrainy will construct a pipeline, stretching 555 km between the towns of Ananiv and Ismail in southern Ukraine, Naftogaz chairman Ihor Bakai said.
Russian Gazprom, which supplies Ukraine and was originally to have done the construction, will use the pipeline as part of its network for exporting gas to western Europe.
Ukraine currently owes Gazprom about $ 1.1 bn, according to Bakai, and is one of its largest debtors.
Bakai said Naftogaz would also supply Gazprom with $ 26 mm worth of pipeline equipment in the spring as payment for current gas supplies, pledging that Ukraine's gas debt in Russia "will not increase" in 1999.
Ukraine relies on Russia for about 70 % of its gas needs.