Signature Of Ukraine-Russia Gas Deal Put Off Again

KIEV, Ukraine -- The signature of agreements sealing a deal on supplying Russian gas to Ukraine at sharply increased prices has been postponed again pending further study, Ukraine's Prime Minister Yuri Yekhanurov said on Wednesday.

Gazprom's headquarters seen in Moscow

Russian gas giant Gazprom briefly cut supplies to Ukraine in the New Year during a tense contract dispute, affecting shipments to anxious customers throughout Europe.

"It looks today as if the agreements will not be signed. Experts are continuing to work on this, Russian experts are here and working," Yekhanurov, who had suggested the deal might be signed on Wednesday, told a cabinet meeting.

"Unfortunately, we are not yet going ahead with the signature. Consultations with Gazprom are proceeding."

The Kremlin makes no secret of its dislike of the West-leaning stand of Ukraine's President Viktor Yushchenko who rose to power a year ago after mass protests forced a rerun of an election initially won by a Moscow-backed candidate.

In Moscow, a Gazprom official linked the postponement to differences over the future activity of a new joint venture agreed under the January 4 deal to supply the gas.

Officials had originally hoped to sign documents last Saturday pertaining to the agreement, hotly debated as Ukraine gears up for a March 26 parliamentary election.

The deal, which prompted Ukraine's parliament to dismiss the liberal government of Yushchenko, provides for gas to be supplied at $95 per 1,000 cubic metres instead of the previous price of $50.

Yekhanurov told the cabinet efforts were being made to cut record gas consumption amid a prolonged cold snap and allegations by Gazprom that Ukraine was exceeding agreed levels.

He said if the weather persisted, he would urge industrial users to cut levels "even if it means suspending their main production".

Last weekend Yekhanurov said Ukraine wanted clarification on pricing mechanisms and on how long prices would remain valid.

The premier also said questions had been raised over whether ministers who had been formally dismissed were empowered to sign the deal.

The dismissal of the government, on grounds that the gas deal betrayed Ukraine's national interest, has plunged Ukraine into a constitutional crisis ahead of the March 26 election. Yushchenko refuses to recognise the government's dismissal.

Source: Reuters