Russia, Ukraine Move To Ease Energy Tensions

MOSCOW, Russia -- Russia and Ukraine moved Wednesday to repair their strained relations, pledging cooperation on energy and a range of other issues that have plagued ties between the two ex-Soviet neighbours.

Russian Prime Minister Vladimir Putin (R) exchanges documents with Ukrainian Prime Minister Yulia Tymoshchenko (L) in Moscow. Ukraine's and Russia's prime ministers on Wednesday voiced cautious optimism that their countries' energy disputes were being resolved, after past gas cut-offs caused alarm in the European Union.

Ukrainian Prime Minister Yulia Tymoshenko said her country had asked Russia to help upgrade its gas transit system, after Moscow complained of being left out of a deal between Kiev and the EU on upgrading Ukraine's ageing pipelines.

"We have invited Russia as one of the main partners to modernise the Ukrainian gas transportation system," Tymoshenko said at a joint press conference with her Russian counterpart, Vladimir Putin.

Putin said Moscow deserved a role in upgrading Ukraine's pipeline network, which handles the majority of Russian natural gas exports to Europe.

"We are not seeking to manage, but we are the main and only supplier to the Ukrainian pipeline system," he said, following talks with Tymoshenko.

Putin added that Russia would not demand billions of dollars in fines from Kiev -- a possibility that had been raised after Ukraine, hit hard by the economic crisis, purchased less gas from Russia than required by contract.

"These sanctions are not being applied," Putin said, estimating that the possible fine could have been as much as two billion dollars.

Apart from any specifics Putin and Tymoshenko discussed, however, it was the sight of the two of them sitting side by side and holding forth calmly before a packed press conference that carried at least as much weight as their words.

Putin afterwards described his daylong discussions with Tymoshenko as "businesslike and open."

In January relations between Moscow and Kiev plummeted to such a low that gas supplies to and through Ukraine were cut off, leaving a string of European countries temporarily without gas in the middle of winter.

"It is good that our cooperation is being fine-tuned.... The times when a certain confrontation was felt are becoming a thing of the past," Tymoshenko said.

"The system of gas supplies in Ukraine has fully stabilized," she said.

For his part, Putin said: "What very much pleases me is that cooperation between certain rather sensitive and important industries and enterprises is not being destroyed but deepened."

Despite the friendly atmospherics, Putin made clear however that Russia had not yet agreed to a request from Ukraine for a five billion-dollar loan.

"We don't have a final decision today," Putin said.

Tymoshenko also sent a Moscow-friendly signal on another issue that hugely angered Russia last year: Ukrainian arms sales to Georgia, which fought a brief war with Russia last summer.

"There are no arms sales to Georgia, nor will there be in the future," Tymoshenko said in response to a reporter's question about whether Kiev was still selling arms to Tbilisi.

Tymoshenko also offered Ukraine's help in setting up an international centre for uranium enrichment, a project led by Kazakhstan and Russia with the aim of supplying third countries with enriched uranium for civilian nuclear power.

Following the talks with Putin, Tymoshenko said Ukraine would by July 15 prepare a long-term contract with Russia on nuclear energy cooperation.

Putin and Tymoshenko were initially due to meet in early April, but Russia postponed the visit after the Ukraine-EU deal on gas infrastructure cooperation sparked an angry reaction from Moscow.

Tymoshenko's visit comes as European Union Energy Commissioner Andris Piebalgs is also due in Moscow for talks on the bloc's gas trade with Russia.

Source: AFP