Ukraine president again blasts PM on Russia gas row

A029766711.jpgKIEV (Reuters) – Ukrainian President Viktor Yushchenko issued a new denunciation of his prime minister on Friday over her stand on gas trade with Russia ahead of new talks to resolve long-running price and supply disputes.

Ukraine and Russia clinched an agreement this week to pay off Ukrainian arrears for gas and resume talks on a 2008 supply agreement but only after Russian gas monopoly Gazprom halved flows to its southern neighbor.

The president is unhappy at Premier Yulia Tymoshenko’s call to eliminate immediately all joint venture intermediaries which ship gas in from Russia and distribute to Ukrainian consumers.

A day after the gas standoff was resolved, Tymoshenko again insisted in a letter to the president that contracts could only be concluded directly between Gazprom and state firm Naftagaz.

“It is very unpleasant for me to say such things, but I am fed up with this policy of recklessness and intrigue,” Ukrainian media quoted the president as saying during a visit to ex-Soviet Tajikistan in Central Asia.

“I truly do not understand just what the prime minister meant by this act.”

The European Union expressed concern over this week’s dispute between Moscow and Kiev because supplies to Western Europe were briefly disrupted in 2006 in a similar row.

A quarter of Europe’s gas comes from Russia, most of it through pipelines across Ukraine.

Yushchenko agreed on the format for 2008 supplies last month with the Kremlin that called for intermediaries to be phased out. The accord unraveled after subsequent talks in Moscow led by Tymoshenko, who is viewed less favorably by the Russians.

The president’s agreement called for the creation of two new joint venture companies. He has since told her that Gazprom’s share in the shipment and distribution of gas could be between 25 and 50 percent.

Tymoshenko — along with several allies in parliament — criticize the proposals, saying they increase Gazprom’s presence in Ukraine and act against Ukraine’s national interests.

Yushchenko’s secretariat has accused the prime minister of “distorting” the deal he clinched last month with outgoing Kremlin leader Vladimir Putin.

Analysts say Tymoshenko’s tough stand — and persistent differences with the president — could lead to new disputes with Gazprom over supplies and, possibly, new reductions in flows to Ukraine.

The only issue solved during talks this week was that Naftogaz would make payments as quickly as possible for January and February supplies of 6 billion cubic meters, worth about $1 billion. But even that figure could be subject to challenge.

The two sides agreed last year to supply gas at $179.50 for 1,000 cubic meters in 2008 for gas brought by Gazprom from Central Asia, with the price of Russian gas much higher.

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