Ukraine to resume talks with Moscow

Russia's energy minister denies reports that Moscow is ready to compromise with Ukraine on demands that it will more than quadruple the price it pays for Russian gas, a dispute that threatens to cut off about a third of the gas that the country of 48 million relies on for heat and industry.

The statement by Viktor Khristenko came hours after Ukraine's energy minister claimed that a compromise had been reached in the tense, politically charged dispute.

President Vladimir Putin and Ukrainian President Viktor Yushchenko spoke by telephone Tuesday evening about the brewing crisis.

Ukraine's energy minister is to come to Moscow on Wednesday for talks, the president's office said.

About a third of Ukraine's natural gas comes from Russia and Ukrainian officials say jacking the price up from the current $50 per 1,000 cubic meters could cripple Ukraine's energy-intensive heavy industry and impede the country's efforts to boost its economy. Russia's state-controlled Gazprom gas monopoly argues that Ukraine should pay $220-230, more in line with world prices and portrays the demand as putting the gas sphere in line with market-economy demands.

Ukraine doesn't argue with the market-economy theory and Yushchenko's office said he told Putin Tuesday that he supports price liberalization. But Ukraine wants the price increases to be phased in over a period of five years.

However, Khristenko, in remarks shown on state-controlled Channel One television, said "no other offers will be made."

Gazprom says it is prepared to shut off gas to Ukraine on January 1 if an agreement isn't reached. Officials in both countries have raised the prospect of sending the issue to the Arbitration Institute in Stockholm, Sweden, which both sides recognize as a neutral body for resolving trade disputes. But the institute cannot undertake the case unless both parties request it.

Earlier Tuesday, Ukrainian Energy Minister Ivan Plachkov said at a round-table discussion that an agreement had been reached for a gradual phase-in of gas price increases, his spokeswoman Lilya Klochko said. However, a Gazprom spokesman quickly denied that any agreement had been reached and Plachkov's office could not be reached later for clarification.

Despite Russia's arguments that market forces demand the price increase, Gazprom is charging significantly less to some ex-Soviet countries. On Tuesday, the company reached agreement to sell gas to Belarus for $46.68 per 1,000 cubic meters - just 20 percent of what it wants Ukraine to pay.

Belarus is closely allied to Moscow, while Ukraine's relations with the Kremlin have been stiff since Yushchenko came to power in January on a platform of moving Ukraine into closer integration with the West.

The dispute also has raised concerns about gas supplies to Europe - about half the natural gas consumed in the European Union comes from Gazprom and most of that is shipped in pipelines that cross Ukraine.

On Tuesday, Ukrainian Prime Minister Yuriy Yekhanurov claimed Ukraine has the right to take 15 percent of the Europe-bound gas shipments that cross Ukraine.

Sergei Kuprianov, a Gazprom spokesman, called the claim "legally illiterate", the AP reports.


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