Industry and Energy

Industry and Energy

Russia, Ukraine to discuss gas at Yalta

19 November 2009 15:47 (UTC +04:00)

Baku -APA-Economics. Russian Prime Minister Vladimir Putin was to hold rare talks with his Ukrainian counterpart Yulia Tymoshenko on Thursday aimed at preventing a repeat of last winter’s gas crisis, AFP reported.
They will meet at the Livadia Palace in the Crimean resort of Yalta, the venue for the 1945 conference between Joseph Stalin, Franklin Roosevelt and Winston Churchill where the Big Three leaders redrew the postwar map.
While relations between Russia and pro-Western Ukrainian President Viktor Yushchenko have reached crisis point, Putin and Tymoshenko have repeatedly boasted of their cordial relationship.
Russia-Ukraine ties have been fraught since a dispute between the two countries over gas prices led to the cut-off of Russian gas to much of Europe for two weeks amid freezing temperatures last January.
Putin is bringing three of his most influential officials to Ukraine -- deputy prime minister Igor Shuvalov, energy czar Igor Sechin and finance minister Alexei Kudrin, Putin’s foreign policy aide Yury Ushakov said.
Alexei Miller, chief executive of the Russian gas giant Gazprom, and energy minister Sergei Shmatko will also be present when talks get underway at around 1430 GMT, Ushakov added.
Adding to tensions ahead of the talks, Yushchenko warned Russian President Dmitry Medvedev in a letter that deliveries of gas to Europe via Ukraine could again be threatened if Kiev and Moscow did not revise their current contracts.
"For Ukraine, the implementation of the engagements is too heavy due to a series of conditions envisaged in the contracts which are not linked to the market," he said in the letter, published by his office.
"Potential risks will appear for the security of gas deliveries to Ukraine and its transit to other European countries," he added.
Yushchenko said transit fees paid by Russia were too low and complained about the so called "take-or-pay" stipulations in the contracts which oblige Kiev to pay for gas even if it is not used.
Putin has accused Yushchenko of preventing the transfer of funds to pay for Russian gas.
Plunging domestic demand for gas has put Ukraine in a quandary. State gas firm Naftogaz has said is stipulated to buy 52 billion cubic meters of Russian gas next year but may need only 27 bcm.
Tymoshenko also reiterated on Wednesday that Ukraine will double the price for transit of Russian gas through its territory from next year -- a change that is unlikely to go down well in Moscow.
"The situation in the gas sphere will naturally be discussed in a detailed and thorough manner," Ushakov told reporters.
Europe is worried that a renewed price dispute between Russia and Ukraine could lead to a new cut in gas supplies to European customers this winter. Russia has repeatedly warned of Ukraine’s financial problems in the past weeks.
Thursday’s meeting will also be a chance for Putin and Tymoshenko to flaunt their strong relations ahead of presidential polls in Ukraine in January in which the Ukrainian premier is a frontrunner.
Putin and Tymoshenko will most likely discuss the presidential vote, set for January 17, even though the issue was not on the official agenda, Ushakov said.
"When the two heads of government meet ahead of the elections, I think this subject cannot be bypassed."
He added however the talks should not be seen as Russia lending support to Tymoshenko’s candidacy.
In the polls, Tymoshenko will compete with Yushchenko and more pro-Russian candidate Viktor Yanukovich, whom Russia supported during the 2004 election.
Securing a better deal on energy, including the possibility of buying less gas next year, will be a top priority for Tymoshenko, analysts said.