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. Last Updated: 07/27/2016

Poland Softens Backing for Ukraine

WARSAW, Poland - Poland told its strategic ally Ukraine on Monday that it would back the most economically viable gas transit route from Russia to Western Europe, toning down once strong support for Kiev's pipeline ambitions.

Russia, with Western commercial partners, recently began planning a new export pipeline which would bypass Ukraine, which Moscow accuses of stealing gas.

Ukraine, fearful of losing transit revenues, has countered that new gas could be more cheaply transported by expanding an existing pipeline pumping Russian gas to Western Europe through its territory. It admits some gas is lost while in transit.

Poland initially objected to the Russian plan to create a new gas export channel, fearing it would isolate its Eastern neighbour, but has since shifted to a more pragmatic stance.

The bypass pipeline is backed by the European Union, which Poland wants to join, and Warsaw will benefit considerably from transit fees, whichever route the pipe takes through its land.

"We want to base our actions (concerning the gas pipeline) on economic viability, not any sort of political deals," Polish Foreign Minister Wladyslaw Bartoszewski told reporters after meeting his Ukrainian counterpart Anatoly Zlenko.

"Whatever the resolution of this situation, it will not harm Polish-Ukrainian relations," he added.

Zlenko agreed with Poland's purely economic approach to gas transit, but said that in his view modernising the existing pipeline was a better solution than building a new channel.

"Ukraine is prepared to increase its (transit) capacity. We have the largest network of pipelines and we do not see a reason for building a new pipeline," Zlenko said.

He added that with "minor modernisation" of the existing pipeline, Ukraine could up its capacity to 170 billion cubic meters per year from the present 120 billion.

Russian gas giant Gazprom has signed a letter of intent with German Ruhrgas and Wintershall, Gaz de France and Italy's Snam to study building the new $2 billion 600-km pipeline skirting Ukraine.