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Cablegate: Ukraine: Ministry of Fuel and Energy On Energy

VZCZCXRO4772
PP RUEHIK
DE RUEHKV #1828/01 2931445
ZNR UUUUU ZZH
P 201445Z OCT 09
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 8628
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZG/NATO EU COLLECTIVE PRIORITY
RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 02 KYIV 001828

SENSITIVE
SIPDIS

DEPT FOR S/EEE, EUR/UMB, EB/ESC/IEC
DOE PLEASE PASS TO JELKIND, LEKIMOFF, CCALIENDO

E.O. 12958: N/A
TAGS: ENRG ECON EFIN EREL PREL PGOV UP
SUBJECT: UKRAINE: MINISTRY OF FUEL AND ENERGY ON ENERGY
SECURITY WORKING GROUP

REF: A. STATE 103668
B. KYIV 1761

KYIV 00001828 001.2 OF 002


1. (U) This is an action request. Please see para 7.

2. (SBU) Summary: Deputy Minister of Fuel and Energy Sergiy
Pavlusha confirmed that Ukraine was planning to send an
interagency delegation, including representatives from
state-owned energy companies Naftohaz and Energoatom, to the
scheduled October 28 Energy Security Working Group meeting.
Pavlusha noted that the Cabinet of Ministers needed to give
final approval for the delegation to travel but expected its
approval shortly. The Ministry also proposed more detailed
agenda items and asked if any joint documents would be agreed
on at the meeting. End summary.

3. (SBU) In an October 20 meeting to discuss Ukraine's
participation in the inaugural U.S.-Ukraine Energy Security
Working Group (ESWG) meeting on October 28, Deputy Minister
of Fuel and Energy Sergiy Pavlusha stated that Ukraine was
preparing to send a delegation comprised of representatives
from the Ministries of Fuel and Energy, Economy, and Foreign
Affairs, along with representatives from the Presidential
Secretariat, the National Security and Defense Council, and
if funding allowed, from the National Agency for the
Effective Use of Energy Resources (NAER) to the meeting.
President Yushchenko's Energy Security Envoy, Bogdan
Sokolovsky, would be included in the delegation but would not
co-chair it, according to Pavlusha. Pavlusha also said that
Ukraine would like to include representatives from
state-owned Naftohaz and Energoatom, provided the USG had no
objection to their participation. The Ministry of Fuel and
Energy had submitted to the Cabinet of Ministers the proposed
delegation and was waiting for approval, which Pavlusha
expected to receive without problems.

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4. (SBU) Pavlusha proposed detailed agenda items for the
meeting and noted that they fit within the broad categories
suggested by the USG (Ref A). Ukraine has proposed the ESWG
discuss joint efforts to:

--diversify Ukraine's energy supply (sources and routes);
--modernize Ukraine's gas transit system;
--develop the Eurasian Oil Transit Corridor (the Odesa-Brody
Pipeline), including prospects of American oil companies
working in the Caspian region to assist in the Corridor's
development;
--reduce Ukraine's dependence on foreign nuclear fuel,
including prospects for the construction of a nuclear fuel
fabrication facility in Ukraine with Westinghouse technology;
--implement the second stage of the Nuclear Fuel
Qualification Project;
--improve safety at Ukraine's nuclear power plants;
--increase renewable energy and energy efficiency in Ukraine;
and
--expand trilateral energy security dialogue between Ukraine,
the U.S., and the EU.

Pavlusha also noted that the Ministry is working to develop a
set of priorities that could benefit from any future U.S.
technical assistance. Recalling his many years at the
Ministry, Pavlusha said that many of the most successful past
energy sector reforms had been achieved with U.S. assistance.

5. (SBU) Pavlusha asked that we provide a detailed agenda and
the list of the USG delegation. He also wanted to know if
the terms of reference or mandate of the ESWG would be
discussed at the inaugural meeting and if any joint
documents, either conclusions of the meeting or a public
statement, would be agreed on at the meeting.

6. (SBU) Pavlusha also briefly discussed Ukraine's accession
to the European Energy Community. He noted that the EU had
given Ukraine a strict timeline for fulfilling sector reform
commitments and characterized the recently signed EU-Ukraine
Memorandum of Understanding (Ref B) as an "advance of trust"
that Ukraine would undertake the required reforms. Pavlusha
also commented that Ukraine needs external support to
complete internal reforms.

7. (SBU) Action request: Please provide guidance on Ukraine's
request to include representatives from Naftohaz and
Energoatom in the delegation, and its inquiries concerning
joint documents, the working group's terms of reference, and

KYIV 00001828 002.2 OF 002


the membership of the U.S. delegation.
PETTIT

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