Russia Doesn’t Expect Gas Pact During Medvedev’s Ukraine Visit

MOSCOW, Russia -- Russia doesn’t expect to reach a new natural-gas supply agreement with Ukraine, which is seeking lower prices for the fuel, during President Dmitry Medvedev’s visit to Russia’s neighbor tomorrow.

Russia's Dmitry Medvedev

While Medvedev will discuss energy with his Ukrainian counterpart Viktor Yanukovych, “we don’t plan to sign any commercial contracts,” the Russian leader’s foreign-policy aide Sergei Prikhodko told reporters in Moscow today.

Alexei Miller, chief executive officer of OAO Gazprom, will accompany Medvedev to Donetsk, in eastern Ukraine, Sergei Kupriyanov, a spokesman for Russia’s gas-export monopoly, said today by phone.

Ukraine is seeking to revise the terms of its gas-supply and transit contracts with Russia to help unlock the next tranche of a bailout loan from the International Monetary Fund.

Yanukovych, who has called the existing accord “discriminatory, unfair and enslaving,” wants to cut the price to $230 per cubic meter from next year’s expected level of $415.

Former Ukrainian Prime Minister Yulia Tymoshenko was sentenced to seven years in jail last week for abuse of power by signing the 10-year gas agreements with her Russian counterpart Vladimir Putin in 2009.

Russia’s Foreign Ministry said Oct. 11 that her conviction appears to be politically motivated and has an “anti-Russian” flavor.

Ukraine’s questioning of gas contracts with Russia is “dangerous and counterproductive,” Putin said the same day.

A price dispute between the two countries disrupted deliveries to at least 20 nations for two weeks amid freezing temperatures in January 2009.

Prikhodko declined to say whether Medvedev and Yanukovych, who will meet at a forum on economic cooperation, would discuss Tymoshenko.

Source: Bloomberg