No progress in gas talks between Russia, Ukraine presidents

Sep 5, 2011, 8:09 GMT

Kiev/Moscow - Russian President Dmitry Medvedev and his Ukrainian counterpart Viktor Yanukovych remained at loggerheads on Monday over the price of gas sold to Ukraine, with Kiev asking for reduced rates and the Moscow side refusing.

Yanukovych and Medvedev met in bilateral talks in the Tajikistan capital Dushanbe, while both were attending a regional leaders' summit.

Yanukovych and his government have pushed for a reduction in the contracted price of Russian natural gas sold to Ukraine, citing falling demand for the fuel due to a slowing economy.

He has also said his government, which has reduced its ties with NATO in favour of closer relations with Russia, would consider a reduction in gas rates an important sign of Kremlin friendliness.

Medvedev said he saw 'nothing concrete' in Ukraine's position on gas pricing, and that Ukraine was bound by contract to buy gas from Russia at previously-agreed volumes and prices, according to Intefax.

Russian government energy sector officials have said they would consider reducing the price of gas sold to Ukraine if Kiev allowed the Russian energy giant Gazprom to take over Ukraine's state-owned natural gas company Ukrnafta.

Yanukovych told Dushanbe reporters Ukraine 'has no intention' of handing over ownership of Ukrnafta.

'We have no choice but to resolve this problem,' Yanukovych said. 'I hope we find a solution without going to court.'

The terms of a Russo-Ukrainian energy treaty signed in 2009 oblige Ukraine to purchase from Russia some 10 per cent more natural gas than Ukrainian consumers currently demand, at rates on par or higher than those paid by European consumers purchasing Russian gas.

Russo-Ukrainian rows over natural gas pricing have in the past caused supply shortages in Europe, which receives some 80 per cent of its Russian natural imports via pipelines crossing Ukraine.

The most recent interruption took place in January 2009 when a dispute over the price of Russian gas sold to Ukraine and the usage of Ukrainian pipelines by Russia caused the cut-off of all Russian natural gas exported to Europe via Ukraine for some three weeks.

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