The United States and the European Union agreed on Friday to work more closely with Ukraine to speed up liberalisation of the ex-Soviet republic's energy market and open it to more investment. Holding the second meeting of the EU-US energy council on the sidelines of a Nato summit in Portugal, US Secretary of State Hillary Clinton and EU foreign affairs chief Catherine Ashton agreed that Ukraine needed to do more to develop its energy infrastructure, particularly as a gas transit route.
Around 100 billion cubic metres of natural gas transits Ukraine from Russia to Europe each year via Ukraine's state energy company Naftogaz, making the country a critical link in Europe's energy framework.
Clinton and Ashton said in a statement that they were encouraged by the steps Kiev had made to reform its market in recent months, including passing a natural gas market law in July, but said much more needed to be done. A working group of the EU-US energy council would support Kiev in improving the investment climate to facilitate the development of indigenous oil and gas resources; modernising the gas transit system; financially restructuring and increasing the transparency of the national oil and gas company, they said.
The push for greater liberalisation in Ukraine is part of a European Union drive to modernise and better secure its energy supply networks from east Europe. The EU and Ukraine hold a summit in Brussels on Monday when energy will be discussed.
The EU-US council said its goal was to "foster a more stable, transparent and efficient energy market in Ukraine". In September, the European Commission, the EU's executive, told Ukraine it expected Naftogaz to separate its gas transit pipelines from other businesses when an EU-Ukraine energy co-operation agreement comes into effect next year.