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Bilateral cooperation between Azerbaijan and Ukraine is developing in the spirit of strategic partnership, Ukrainian Prime Minister Mykola Azarov said in an interview with Trend news agency on the eve of his visit to Baku that starts Tuesday.

``My visit focuses on further enhancement of such partnership,`` he said.

Azarov said the main issues to be discussed during the visit are economic and military cooperation, as well as interaction in the fuel and energy sector. He underlined those as the areas in which the Ukrainian-Azerbaijani intergovernmental commission works effectively.

``Our [trade] turnover in 2011 [$1.4 billion] slightly declined compared to 2010 [nearly $1.6 billion]. Although these figures exceed the crisis level of 2009 [$0.9 billion], I believe that we have many untapped opportunities for significant enhancement of partnership within the implementation of the plan of comprehensive cooperation between Ukraine and Azerbaijan for 2011-2015, signed by the two countries` presidents Viktor Yanukovych and Ilham Aliyev during our president`s official visit to Baku in April 2011,`` Azarov noted.

He said that presently, the bilateral agenda includes issues whose addressing requires ``an additional impulse``.

``First of all, this concerns cooperation in the fuel and energy sphere: Ukraine is interested in the construction of an oil refinery on the Black Sea coast for refining Azerbaijani oil, in conducting exploration and prospecting on Azerbaijan`s prospective structures by Ukraine`s national joint-stock company Naftogaz,`` Azarov said.

He said there is a perspective for Ukrainian construction companies as well as companies of the agricultural sector to enter Azerbaijani market.

Azarov also noted that in April 2009, the cabinets of ministers of Ukraine and Azerbaijan signed a framework agreement on cooperation in the exploration and use of outer space for peaceful purposes.

``Given Azerbaijan`s plans to further develop its own space industry, we are ready to enter the level of implementation of long-term projects: from launching Azerbaijan satellites into the orbit to training specialists for the space industry,`` Azarov said. He said work is underway in this area at the bilateral level, but it should be stepped up.

Nagorno Karabakh conflict
Ukraine`s position on the resolution of Armenia-Azerbaijan Nagorno-Karabakh conflict remains firm and unchanged, Azarov`s statement suggests.

``It dwells upon the necessity of resolving this conflict only by peaceful means, based on the norms and principles of international law, which include respect for sovereignty and territorial integrity of Azerbaijan within its internationally recognized borders, as well as creating suitable conditions for economic recovery and safe return of refugees,`` he said.

The Ukrainian prime minister said his country is ready to facilitate the negotiations on the Karabakh conflict resolution within the mediating OSCE Minsk Group, in particular, in the context of Ukraine`s OSCE chairmanship in 2013.

Energy cooperation
Ukraine is interested in the Eurasian oil transportation corridor, which envisages creating a new route to diversify oil supplies from the Caspian region to Ukraine, as well as transit to European markets, Azarov said in the interview.

In February 2011, Ukrtransnafta began pumping Azerbaijani oil into the Odessa-Brody pipeline to transport it to the Mozyr oil refinery in Belarus, he said, adding that the volume of transit is 4 million tons per year, which is 10 times below the maximum design capacity of the Eurasian oil transportation corridor.

``Unfortunately, although the development of a feasibility study on extending the pipeline to Polish Gdansk has been completed, Poland has not decided yet to finish building the Odessa-Brody-Plock-Gdansk oil pipeline. We have repeatedly offered our Polish partners to implement the project in full, but at present they do not consider it expedient for themselves,`` he said.

At the same time, Azarov said Ukraine welcomes the work of the Azerbaijani state oil company Socar in the country. In January 2011, it opened a network of gas-filling stations in Ukraine, which it plans to expand to 1,000 units, Azarov said.

Ukraine became the first country in Eastern Europe where Socar started bunker business in August 2011, providing services for fuelling ships directly in the waters of the Dnieper, he added.

Azeri gas supplies
According to Azarov, after a Ukrainian-Azerbaijani agreement on transporting oil and liquefied natural gas to Ukraine was signed in January 2011 in Davos, in the presence of Presidents Viktor Yanukovych and Ilham Aliyev, Ukraine began active preparations for the implementation of the project of building an LNG-terminal near Odessa to receive liquefied gas.

``Feasibility study of the terminal construction project has been prepared by the Spanish company Socoin. According to preliminary estimates, it will be possible to begin its construction this year,`` he said.

Azarov said that after completing the first stage of the operations -- by late 2014 -- Ukraine will be able to receive about 2 billion cubic meters of liquefied natural gas per year, and bring the figure to 5 billion cubic meters in a year and to 10 billion cubic meters over three years.

``The governments of our countries are preparing a relevant bilateral agreement, as well as a protocol on the establishment of a joint venture to develop a feasibility study for arranging transportation of liquefied natural gas from Azerbaijan to Ukraine.``