Ukraine, Russia “Doomed” To Gas Compromise - Yanukovych

DAVOS, Switzerland -- Ukraine hopes to find a solution to the gas dispute with Russia soon, President Viktor Yanukovych said on Friday in Davos at the World Economic Forum.

Viktor Yanukovych says Ukraine is pushing for gas price revision with Russia, to no avail.

“Ukraine pays the world’s highest gas price. No one pays a price for gas like the price Ukraine has [to pay]. I have repeatedly asked the question to myself, our Russian partners and all who directly dealt with the 2009 contract: ‘Why and for what was Ukraine punished?’” Yanukovych said.

“No one has found an answer to this question for me. We will have to find an answer to it as soon as possible,” the Ukrainian president said.

“We have been negotiating for two years. We, both Russia and Ukraine, realize that we are ‘doomed’ to make the decision, find a compromise. The process is ongoing but there’s no solution yet,” he said.

Ukraine has long been seeking to alter the terms of the 2009 gas deal it signed with Russia.

The deal ties the price of gas to oil prices, which have risen strongly since 2009, boosting Ukraine's gas bill.

Ukraine will have to pay some $416 per cubic meter of Russian gas in 2012. Kiev insists the price and volume of its gas imports should be reduced.

Yanukovych said Ukraine has considerably cut Russian gas consumption volumes and will continue following that path, seeking ways to diversify energy supplies.

“The situation in the gas sector for Ukraine bears all the hallmarks of a threat to national security, without exaggeration,” he said.

In October 2011, former Prime Minister Yulia Tymoshenko was found guilty of abuse of office when she signed gas deals with Russia in 2009.

She was sentenced to seven years in jail and was ordered to pay $187 million in damages to the Naftogaz company.

Tymoshenko said the charges against her were President Viktor Yanukovych's political revenge, which he denied.

Tymoshenko’s supporters say the prosecution is politically motivated.

The Ukrainian authorities deny the accusations.

On Friday, Ukrainian Prime Minister Mykola Azarov said the gas talks with Russia were very difficult.

“Very difficult talks are being held with Russians, who believe this contract is, like [Russian energy giant Gazprom CEO Alexei] Miller said, made of reinforced concrete,” Azarov said on Friday at a meeting with labor union representatives.

“What can we use to break reinforced concrete?”Azarov asked them. “We are trying to find a proper tool now.”

The premier said a number of important decisions were made at a recent meeting of Ukraine’s National Security and Defense Council: to reduce gas consumption, to develop energy saving technology and diversify the fuel supply routes.

“This is our hammer drill answer to Russia,” he said.

Source: RIA Novosti