Ukraine's Premier Says Moscow Willing To Hold Gas Prices Steady Through 2006

KIEV, Ukraine -- Ukraine's new prime minister said Moscow was willing to hold gas prices steady through year's end, the president's office said Thursday.

From left foreground, Kazakhstan's President Nursultan Nazarbayev, Russian President Vladimir Putin and Ukraine's Prime Minister Viktor Yanukovych, right, walk during a meeting at the Black Sea resort of Sochi

Viktor Yanukovych, leader of the Party of Regions who was confirmed as prime minister earlier this month, met with President Viktor Yushchenko on Thursday to inform him about the results of his two-day visit to Russia, dominated by talks on gas supplies.

Ukraine, which receives much of its gas supplies from Russia, earlier this year agreed to a twofold price increase after a bitter dispute with Russian gas monopoly, Gazprom. The Russian company briefly turned off the taps to Ukraine at the height of winter, which also triggered a brief shutdown of supplies to Western Europe after Ukraine began siphoning gas passing westward through its pipelines.

As part of the January deal that resolved the dispute, Ukraine agreed to receive a mixture of Russian and cheaper Turkmen gas at a price of $95 per 1,000 cubic meters from an intermediary company, RosUkrEnergo.

Moscow had previously warned the price would increase if Turkmenistan started charging more for its gas, which Turkmenistan has indicated it wants to do in September. Turkmenistan has said that it wants to raise the price from $65 per 1,000 cubic meters to as much as $140 per 1,000 cubic meters as of Sept. 21. Russia has set the price for its gas at $230.

Yushchenko's office said in a statement that Yanukovych was convinced after his meetings with Russian President Vladimir Putin and the Russian premier of "Russia's willingness to not raise prices on natural gas through the end of the year." The statement cited Yushchenko as saying that Yanukovych had "managed to strengthen" January's agreement. It did not elaborate.

Russia strongly supported Yanukovych's fraud-marred bid to win Ukrainian presidency in 2004, and many Ukrainians expected that he might be able to achieve more concessions from Moscow than the Western-leaning Yushchenko, who has sought to drive this ex-Soviet republic closer to the West.

But before the trip, Yanukovych insisted that Ukraine's main bargaining tool - the pipelines that carry Russian gas to more lucrative Western markets - would never be put on the negotiating table as way to get cheaper prices.

Upon his return to Ukraine, Yanukovych called the situation in Ukrainian-Russian gas cooperation "rather difficult." He said both nations had moved closer to agreement, and negotiations were continuing.

Source: AP