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Ukraine May Seek Fresh Talks With Russia On Gas

Russian Prime Minister Vladimir Putin and his Ukrainian counterpart, Yulia Tymoshenko, shake hands after signing documents on gas supplies in Moscow on January 19.

Russian Prime Minister Vladimir Putin and his Ukrainian counterpart, Yulia Tymoshenko, shake hands after signing documents on gas supplies in Moscow on January 19.

KYIV (Reuters) -- Ukraine needs fresh talks on changing this week's gas agreement with Russia, a senior aide to President Viktor Yushchenko has said, raising fears of new gas supply disruptions to Europe.

The deal, reached by Ukraine's Prime Minister Yulia Tymoshenko, was a relief for Europe after a two-week cut off in Russian gas supply but it exposed rifts in Ukraine's leadership.

Tymoshenko would not allow the gas deal to be revised, a senior government official said.

'Carefully Analyze'

Oleksander Shlapak, Yushchenko's economic aide, said Kyiv would call for fresh talks with Moscow to renegotiate the deal on better terms for Ukraine.

"I believe the Ukrainian side must again carefully analyze this out proposals to the Russian side on altering this agreement and begin consultations no later than this summer," Shlapak told a news conference.

Speaking in Uzbekistan, the head of Russian gas monopoly Gazprom, Aleksei Miller, ruled out any revision to the Ukrainian gas deal negotiated between Tymoshenko and Russian Prime Minister Vladimir Putin.

"Where does this suggestion of revising the contract come from? A Ukrainian satirical newspaper?" Miller told reporters.

Shlapak said changing the deal was vital to ensure survival of the Ukrainian economy, heading into its worst recession in a decade due to a deepening global financial crisis.

"The talks will be difficult, but there is no other way. Ukraine's economy cannot withstand the process of securing gas and subsidizing the transit of [Russian] gas," Shlapak said, without saying what Yushchenko wanted to change.

The gas row intensified the EU's search for alternative sources of energy and injected fresh impetus into the stalled Nabucco project to supply Central Asian gas to EU customers.

Highlighting Moscow's resolve to defend its interests in Central Asia, Russian President Dmitry Medvedev was in Uzbekistan on January 23 to win its support for a rival trans-Russian gas pipeline.

Alternative Sources

The deal created a fresh rift between Ukraine's president and prime minister -- allies in the 2004 Orange Revolution that swept pro-Western politicians to power but at odds on virtually all issues since Tymoshenko became premier again in late 2007.

In Kyiv, the senior government official was adamant that Tymoshenko would not allow renegotiation of the deal.

"They [agreements] represent the country's interests and were drawn up within the framework of Ukraine's strategic and economic interests," First Deputy Prime Minister Oleksander Turchynov told a news conference.

Tymoshenko says the deal provides the best possible conditions for Ukraine -- a 20 percent discount on European prices and the elimination of intermediaries in the gas trade.

But Yushchenko called the accord a "defeat," citing steep price increases in the first quarter with no rise in transit fees for Ukraine to offset them.

As Europe, which relies on Russia for one-quarter of it gas needs, rushed to find alternative energy sources, Bulgaria announced it would start talks with the EU Commission on the possible restart of a Soviet-era nuclear plant.

Bulgaria shut the two units at its sole Kozloduy nuclear power plant in late 2006 to win EU entry. But parliament voted in favor of restarting them to compensate for damages and losses caused by the cuts in Russian gas supplies.