Ukraine sees long-term gas deal with Russia by Nov

16:33, 01 July 2008
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long-term gas supply deal with Russia could be signed...

Ukraine`s energy minister said on Tuesday that a long-term gas supply deal with Russia could be signed by November, which may help avoid periodic last minute talks that have sometimes led to brief supply cuts, according to Reuters.

Ex-Soviet Ukraine currently pays $179.5 per 1,000 of cubic metres of gas, still well below market levels despite several years of steep hikes, and hopes that the transition to a price paid by other European countries will be gradual.

"In our action plan with our colleagues in the Russian energy ministry, we foresee that we would sign long-term contracts sometime in October-November," Energy Minister Yuri Prodan told a news conference.

"The preparations for the contracts provides for them to be ready to be signed in September," he said.

Ukraine`s state energy firm Naftogaz has previously said it would want from Russia`s gas monopoly Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz) a 15-year contract that would stipulate exact price rises for the next five years.

Ukraine is a transit country for almost a quarter of gas going to Europe, which has been affected in the past when Ukrainian-Russian gas talks led to disputes and supply cuts. Prodan declined to say what price Ukraine could pay next year. Gazprom said last week that the price could more than double to $400 per 1,000 cubic metres as Central Asian states raise their own gas prices.

Prime Minister Yulia Tymoshenko was in Moscow on Saturday and met her Russian counterpart, Vladimir Putin, who said while Moscow wants to raise gas prices gradually to market levels, the Central Asian plans to hike prices could prevent that.

Tymoshenko, cited by Interfax-Ukraine news agency on Sunday, said she thought Kiev would pay market prices only in three or four years, and that a doubling of the price next year, as Gazprom suggested, was "absolutely impossible" for Ukraine.

Ukraine agrees in principle that it should start paying market prices for its gas at some stage, after decades of subsidised energy under the Soviet Union.

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