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Ukraine president seeks gas price cuts from Russia

Sep 24, 2011, 13:30 GMT

Moscow - Ukrainian President Viktor Yanukovych flew to Moscow on Saturday to seek lower gas prices in meetings with his Russian counterpart, Dmitry Medvedev.

Yanukovych was scheduled to meet with Medvedev, Prime Minister Vladimir Putin and top executives from the energy giant Gazprom during the one-day summit, to be held at the Russian president's personal residence outside the Russian capital.

The Ukrainian delegation will make the Kremlin 'an extremely interesting offer' in an attempt to break a long-running deadlock over contracted terms for Russian gas sold to Ukraine, said Kostyantyn Hryshchenko, Ukraine's foreign minister, in a Friday evening Inter television interview.

Ukrainian media reported Kiev would offer the Kremlin its partial participation in a customs union with Russia, Kazakhstan and Belarus in exchange for reduced energy prices.

Medvedev has said Moscow would consider a price cut if Ukraine became a full participating member of the customs union, or if Ukraine were to sell its gas transportation network to Gazprom.

Yanukovych and other Ukrainian officials have repeatedly rejected both options, calling them dangerous to Ukrainian sovereignty.

'Concessions like that are absolutely out of the question,' Hryshchenko said.

Though long a supporter of close Russo-Ukrainian relations, Yanukovych has for more than a year called for Gazprom to cut prices and volumes of natural gas sold to Ukraine, citing his country's weak economy.

Gazprom officials have said the price, as stipulated in a 2009 contract between the countries, is fair and equitable. Currently, Ukraine pays Russia marginally more for its gas than Gazprom's European customers.

Disputes between Russia and Ukraine over gas pricing, and the transit of Russian natural gas westward via Ukrainian pipelines, have halted gas deliveries to EU nations twice, in 2006 and 2009.

Russia in late August began pumping gas into a pipeline under the Baltic Sea that will deliver the fuel directly to Germany. In early September, it agreed with French and Italian energy companies to build a pipeline under the Black Sea to send gas to the Balkans.

Both pipelines bypass Ukraine and will prevent Kiev from holding Russian gas exports to the EU hostage in the future, Gazprom officials have said.

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