Russian gas export monopoly Gazprom may agree to sell gas to Ukraine at a lower price if Kyiv allows the company to expand in its domestic market, a newspaper said on Tuesday.

Gazprom and Ukraine`s state gas company Naftogaz are in talks for the Russian energy giant to supply Ukrainian industrial customers directly with 10 billion cubic metres (bcm) of gas next year, Ukraine`s Delo business newspaper reported, quoting sources close to the negotiations.

This year a Gazprom unit has the right to supply Ukraine`s domestic market directly with 7.5 bcm, or around one seventh of Gazprom`s total gas exports to Ukraine of 55 bcm per year.

Видео дня

Both Gazprom and Naftogaz, which are in protracted talks over Ukraine`s debt for earlier gas deliveries and next year`s supplies, declined to comment.

Gazprom deputy chairman Alexander Medvedev said earlier this week that his company had made Naftogaz a proposal which may help the two sides solve the debt problem and sign the 2009 supply deal.

Gazprom has said Ukraine might have to pay over $400 per 1,000 cubic metres (tcm) for Russian gas next year, up from the $179.5 per tcm it currently pays.

Gazprom says Ukraine owes it $2.4 billion for September-November gas supplies plus interest for late payment. Ukraine says it owes $2 billion.

Reuters via Forbes