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Russian Gas Deal 'Aims To Support' Ukraine's Tymoshenko


Yulia Tymoshenko

Yulia Tymoshenko

MOSCOW (Reuters) -- Ukraine's Prime Minister Yulia Tymoshenko will sign a gas deal with Moscow on October 2 aimed at showing Russia's support for her government without any mention of a final gas price, Interfax news agency has reported.

"This agreement is of political nature and aims to support the government of Yulia Tymoshenko," Interfax quoted an informed source in Moscow as saying.

Tymoshenko, locked in negotiations to form a new ruling coalition, has been accused by critics at home of turning to Moscow for political support after earlier criticizing the Kremlin.

The Russian government said this week that Tymoshenko and Russian Prime Minister Vladimir Putin will discuss "various aspects of trade and economic cooperation, and also mutual activities in the energy sphere."

In Kyiv, Tymoshenko said at the start of a cabinet meeting that she would present a report for the approval of ministers setting down the framework for her talks.

She said her report, to be made along with the head of the state gas and oil firm Naftogaz, amounted to implementing President Viktor Yushchenko's order calling for a long-term gas accord.

"If the directives are confirmed today, then I will embark on my trip tomorrow to start talks on ensuring gas supplies for Ukraine in 2009," she told the meeting.

Ukraine is heavily dependent on gas imports from Russia, with prices for 2009 still under negotiation.

Europe closely watches gas talks between Russia and Ukraine after a pricing dispute briefly cut transit supplies of Russian gas to Europe in January 2006.

Russia supplies a quarter of Europe's gas and its gas export monopoly Gazprom has warned Kyiv that prices for Ukraine will more than double in 2009 after oil prices rose to a record earlier this year.

Ukraine currently pays $179.50 per 1,000 cubic metres or less than half of average European prices. Tymoshenko said last week that a price of $400, as suggested by Gazprom, would be an "absolute shock" for Ukraine's economy.
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