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Russia agrees to Ukraine gas deal

Latest update : 2008-02-21

Russia says it will stick to a gas-pricing deal with Ukraine, a deal to which it had agreed in principle earlier this month. (Report: A.Roy)

MOSCOW, Feb 20 (Reuters) - The prime ministers of Russia and
Ukraine said on Wednesday they would stick to gas deals reached
by their presidents earlier this month, calming fears that
Ukraine's premier could challenge the agreement.

Rows over gas between Ukraine and Russia, which supplies a
quarter of Europe's gas needs largely via Ukraine, have aroused
widespread concern since one such dispute disrupted exports to
European Union countries in January 2006.

"We have confirmed our absolute commitment to the agreement
reached by our presidents," Russian Prime Minister Viktor Zubkov
told reporters after a meeting with his Ukrainian opposite
number Yulia Tymoshenko.

"I can firmly say that we have outlined constructive and
absolutely effective ways of settling every single issue," said
Tymoshenko, who was to meet Russian President Vladimir Putin
later on Wednesday.

Ukrainian President Viktor Yushchenko met Putin last week
and clinched a last-minute deal to settle payment of Ukrainian
arrears for gas supplies and, over time, to eliminate
intermediaries in the gas trade.

But the Russian and Ukrainian state energy firms produced
conflicting statements following the agreement, suggesting that
final details had yet to be agreed. Ukrainian officials had said
Tymoshenko might want to start talks from scratch.

Tymoshenko, back in the office since December, had difficult
relations with Moscow during her first term as prime minister in
2005. Yushchenko, viewed more favourably in Moscow, this week
accused her government of negligence and moving too slowly in
paying off the arrears.


Relations between Yushchenko and Tymoshenko have become
strained as politicians begin gearing up for a 2010 presidential
election. Yushchenko is due back in Moscow this week for a
summit of leaders of ex-Soviet states.

Yushchenko's secretariat restated the accusations against
the government while Tymoshenko was in Moscow, saying the
impression was being created that Ukraine was delaying payments.

"The government is coming up with a variety of reasons to
justify this, which casts doubt on the country's reputation as a
reliable partner," it said.

The statement also said Tymoshenko's announcement that she
was starting talks "from scratch" was tantamount to saying her
government was ready to disavow the gas agreements.

Tymoshenko stood alongside Yushchenko in the 2004
pro-Western "Orange Revolution" that swept him to power but was
fired seven months after her appointment as prime minister. She
returned to the job last December after a snap election.

Ukraine's state gas and oil company Naftogaz said its
chairman, Oleh Dubyna, would head a delegation accompanying the
prime minister to discuss debts and details of gas shipment and

Naftogaz said on Wednesday it had paid a second tranche of
arrears of $178 million. Russian gas export monopoly Gazprom
puts the total at $1.5 billion.

Date created : 2008-02-21