Azernews.Az

KYIV – Ukraine and Azerbaijan have signed an intergovernmental memorandum on the supplies of Azerbaijani liquefied natural gas and an agreement on cooperation in oil transit to Europe, Russian RIA Novosti news agency quoted Ukraine`s presidential press service as saying on Friday.

Ukraine expects these agreements to help it reduce dependence on Russian energy supplies following several energy spats between the two neighbors in recent years, which led to a brief halt of Europe-bound gas supplies in 2006 and 2009.

Azerbaijani and Ukrainian officials signed the agreement on the sidelines of the World Economic Forum in Davos on Friday in the presence of Presidents Ilham Aliyev and Viktor Yanukovich.

Ukraine’s Energy Minister Yuri Boiko has told Ukrainska Pravda newspaper that the first agreement envisions deliveries of 2 billion cubic meters of Azerbaijani liquefied gas in 2014 and 5bn cubic meters in 2015.

Under the other deal, Azerbaijan is to supply oil through the Odessa-Brody pipeline in a reverse mode.

"8 to 12 million tons of crude is to be pumped [via the conduit] this year. And this is just the beginning," Boiko said.

According to him, Azerbaijani oil will reach Belarus. Moreover, it will be transported to Europe when the ongoing talks with European partners draw to a close. "More specifically, oil is to be transported to Slovakia," the minister said.

Ukraine's plans to diversify its energy supplies and reduce their cost include building a terminal for LNG storage on the Black Sea coast by 2015. Preliminary estimates suggest that the project to build the terminal with an annual capacity of 10 billion cubic meters will cost $2.5 billion.

Ukraine considers Azerbaijan its priority supplier of liquefied natural gas, and is also in talks with Libya, Algeria, Qatar and Indonesia.

In the oil sector, the two countries are part of a five-nation Sarmatia consortium to bring Caspian crude from Azerbaijan to Poland and the Baltic Sea via Ukraine by reviving the Odessa-Brody pipeline. The consortium has already completed a feasibility study of the future oil transportation network through Azerbaijan, Georgia, Ukraine and Poland.