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EU, Ukraine Eye Closer Ties To Avoid Gas Snags

Ukrainian President Viktor Yushchenko (left) and EU Commission President Jose Manuel Barroso after meeting in Brussels
BRUSSELS (Reuters) -- The European Union and Ukraine have agreed to seek closer ties in the energy sector to try to avoid future disruption of Russian gas supplies through the country after this month's crisis.

Visiting President Viktor Yushchenko said that accords signed with Moscow by his domestic political rival, Prime Minister Yulia Tymoshenko, were "not easy" but gave no indication at a news conference that he would challenge them.

Many European countries were cut off from Russian natural gas for days because of an energy payment dispute between Moscow and Kyiv, undermining their reliability as suppliers.

"We are all determined that this does not become an annual event," European Commission President Jose Manuel Barroso told a news conference after meeting Yushchenko in Brussels.

He said the EU and Ukraine would work on bringing Ukraine to the European Energy Community, a loosely defined body created in 2005 to ensure close cooperation within the bloc and among some neighboring countries and to liberalize the sector.

Barroso and Yushchenko said Ukraine should also integrate its electricity grid with those of EU members from Central Europe and, crucially, link better its gas-transit pipelines with the EU's wholesale gas system.

"It is important for Ukraine to join the European Energy Community agreement," Yushchenko said.

He said he counted on EU countries' investment to modernize Ukraine's gas-transit system, which will be discussed at a high-level conference on March 23.

Yushchenko has warned that the deal signed with Russia to end the gas dispute could bring Ukraine's state energy company Naftohaz to its knees financially and allow Russians to move in and take over property to cover the resulting debts.

Bohdan Sokolovskiy, Yushchenko's energy aide, said on January 26 the deal could be declared invalid if it was shown to have been concluded under pressure. But Yushchenko did not give any indication that he would challenge them, saying only: "The agreements signed are not easy ones."

Barroso and Yushchenko voiced confidence the EU and Ukraine would sign this year as planned an association agreement, which would provides for easier trade and travel, some aid, and strong economic cooperation.

Some politicians in the 27-member bloc are blaming Ukraine for its role in the gas crisis, saying privately Kyiv had failed to pass on Russian gas when Moscow made it available.

But Barroso said the EU would not punish Ukraine. "In our bilateral relations, we are not taking any negative consequences," he said.