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Kiev says Moscow unwilling to change gas deal, threatens transit

Moscow's refusal to amend gas contracts with Ukraine is putting transits to Europe under threat.

KIEV, September 8 (RIA Novosti) - Moscow's refusal to amend gas contracts with Ukraine is putting transits to Europe under threat, the Ukrainian president's energy security adviser was quoted by the presidential press service as saying on Tuesday.

"Russia's possible refusal to develop the gas contracts is a serious threat to [national energy firm] Naftogaz's operations and consequently the uninterrupted transits of Russian natural gas via Ukraine," the press service quoted Bohdan Sokolovskiy as saying.

The statement came after President Dmitry Medvedev told the Gazprom chief on Monday that the energy giant should stop paying Ukraine's transit fees in advance and stick to the January agreement that ended a gas row between the ex-Soviet allies, which does not include provisions on advance payments.

Analysts suggested the instruction could be followed by a refusal to pay higher transit fees to Ukraine despite an agreement reached by the two countries' prime ministers earlier this month.

Yulia Tymoshenko and Vladimir Putin agreed in Poland last week that Ukraine would import less gas than agreed in the contracts without paying any fines, and would increase its transit fees.

On Monday, Tymoshenko, who plans to run in presidential elections due on January 17, said the gas deals with Russia would not be reviewed. She also said Ukraine had stopped buying Russian gas for storage as it had sufficient supplies in its underground facilities to ensure the smooth transit to the EU this winter.

Russian gas supplies to the EU were interrupted for two weeks in January over a bitter pricing and debt row between Moscow and Kiev. Russia supplies about 80% of its Europe-bound gas via Ukraine.

Tymoshenko said the agreement reached in Poland did not require amendments to the contracts, but several additional documents would be signed, which would not run counter to the contracts.

Tymoshenko said Kiev would buy around 25 billion cubic meters in 2010, half the agreed amount of gas stipulated in the 2009-2019 contract. Naftogaz earlier said the transit fee could rise from the current $1.7 to $2.7 per 1,000 cu m per 100 km for Russian gas transits across Ukraine next year.

Speaking on Tuesday after talks with the foreign minister of Slovakia, which was badly affected by the gas supply cutoff last winter, the Russian foreign minister said he hoped "Russia's gestures of goodwill" would prevent a new gas crisis.

"I hope all those measures that have been taken well in advance, those gestures of goodwill from Russia will prevent a new crisis. We have been receiving similar signals from the Ukrainian government," Sergei Lavrov said.

In comment on Ukrainian officials' latest statements on gas supplies, a senior Russian analyst said President Medvedev should make no more concessions to Ukraine.

Kirill Frolov, an expert on Ukraine at the CIS Institute think tank, also said that statements made in Ukraine "are further proof that Nord Stream and South Stream [gas pipeline projects] should be intensified and an argument in persuading the European community of the need in the pipelines."

Russia has sought to diversify its gas supply routes to Europe in the wake of a series of disputes with transitional transit nations. Nord Stream will pump Siberian gas to Western Europe along the Baltic Sea floor, and South Stream is to be built via the Black Sea. The projects have triggered environmental concerns and fears of a growing energy reliance on Russia in some EU nations.


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