Ukraine’s state-owned energy company Naftogaz and Polish pipeline operator Gaz System have signed a deal for the construction of a gas interconnector, Ukraine’s Prime Minister Arseniy Yatsenyuk has said.

Speaking at a joint news conference with Poland’s Prime Minister Ewa Kopacz in Kiev on Monday, Yatsenyuk said the interconnector between a newly-built liquefied natural gas (LNG) terminal in Poland and Ukraine would be able to transport up to 10 billion cubic metres (bcm) of gas per year.

According to Yatsenyuk, the agreement ensures that Ukraine will remain an important hub in the European energy market.

The interconnector will give Ukraine access to LNG terminals already built in Lithuania and Poland. It will also provide Ukraine with access to Germany’s gas market, which is one of the biggest and most active ones, Yatsenyuk added.

The cost of the project on the Ukrainian territory is estimated at USD 245M, vedomosti.ru reported.

A feasibility study for the new, 65-kilometre pipeline should be completed in the first half of the year.

During her meeting with Yatsenyuk Ms Kopacz announced that Poland will provide a loan worth EUR 100M to Ukraine to help Kiev rebuild the Donbas region in eastern Ukraine.

The region has been the area of heavy fighting between pro-Russian rebels and Ukrainian government forces since April 2014. Fighting has wrecked homes, commercial buildings and infrastructure.