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Russia's Putin Wants New Year Without Gas 'Shocks'

Russian Prime Minister Vladimir Putin
YALTA (Reuters) -- Russian Prime Minister Vladimir Putin said on November 19 that existing gas deals with Ukraine were a guarantee of stable energy supplies to Europe and he hoped for a New Year without any gas "shocks."

In good humor after talks with Ukrainian Prime Minister Yulia Tymoshenko on gas supplies to Europe via Ukraine, Putin said: "We sincerely expect that all earlier reached agreements will be implemented and from our side we guarantee full implementation."

"It would be very good to meet the New Year without any shocks," he told a news conference.

His words seemed likely to relieve the European Union which has anxiously monitored the talks in Yalta, southern Ukraine, for indications of whether a new end-of-year gas conflict endangering supplies to EU consumers was on the cards.

Russian supplies piped across Ukraine provide Europe with a fifth of its gas.

Last January millions of people in southern Europe were left without heating after Russia halted gas deliveries to Ukraine for two weeks because of a pricing dispute.

Putin and Tymoshenko brokered a deal ending that dispute. But relations between Russia and its fellow former Soviet republic have slid further in the run-up to a Ukrainian presidential election on January 17, and the outcome of the Yalta talks had been difficult to read.

The gas deal has become mired in infighting in Ukraine between Tymoshenko and her rival, President Viktor Yushchenko.

Though Ukraine has so far settled all its bills on time, Tymoshenko has conceded that meeting the monthly payments for gas is a struggle due to the dire state of the economy.

Putin, in a concession to Kyiv, said Russia's gas giant Gazprom and Ukrainian gas firm Naftogaz would agree a new volume of gas to be imported next year taking into account the economic crisis in Ukraine.

He also promised not to levy fines on Ukraine for using a lower volume of gas than that set out in current contracts.

Putin Warning

Earlier Tymoshenko, responding to a warning a week ago by Putin, pledged that Ukraine would scrupulously fulfil its obligations on the transit of Russian natural gas to Europe.

"We will very carefully and distinctly carry out our part in the transit of the gas," she said. "Ukraine has paid and will pay on time."

Putin warned on November 11 that Russia would cut gas deliveries again if Ukraine stopped paying on time, under an agreement worked out last January, or if it siphoned off transit gas.

The upbeat comments and warm words by Putin and Tymoshenko contrasted with an earlier frosty exchange between Moscow and Kyiv over the gas deal.

Yushchenko, in an open letter to Russian President Dmitry Medvedev, asked him to revise the gas deal which he believes sets too high a price for Russian gas and pitches too low a price for transit fees to Ukraine.

But a Kremlin aide snubbed him, saying Kyiv was trying to blackmail Russia and Europe over energy supplies.

Tymoshenko is a front-runner in Ukraine's election next January while Yushchenko, whose pro-Western policies have riled Moscow, trails far behind her in popularity ratings.

Some analysts say that Moscow clearly favours Tymoshenko as president over the other front-runner, the pro-business Viktor Yanukovych, and warm comments by Putin about Tymoshenko appeared to confirm this.

Asked for his views on Ukraine's forthcoming election he said: "It is not my business to give ratings -- it is up to the people of Ukraine to give those ratings.

"We find it comfortable to work with the government of Tymoshenko. I think that our cooperation has helped stabilise and strengthen relations between Russia and Ukraine."