Ukrainian Cabinet holds special session to view gas deal with Russia

Ukraine's Cabinet on Tuesday held a special session to consider the gas deal aimed at keeping Russian and Central Asian gas flowing into Ukraine. The agreement calls for setting up a new enterprise that will assume responsibility for selling gas within Ukraine to industrial and residential consumers. The joint venture will be part owned by Ukraine's state-controlled Naftogaz and RosUkrEnergo, an intermediary firm that is 50-50 owned by Russia's OAO Gazprom and other unidentified investors.

The deal to set up the joint venture was part of a complicated, face-saving agreement worked out earlier this month between Kiev and Moscow to resolve a bitter dispute over gas prices.

But the plan has come under fire in Ukraine and abroad amid allegations that too little is known about RosUkrEnergo. The intermediary has been accused of having links to Semyon Mogilevich, a Ukrainian-born Russian citizen and reputed organized crime figure who is wanted by the FBI.

The company's refusal to release the names of its investors also has raised concerns among Ukrainian opposition lawmakers who united to sack President Viktor Yushchenko's Cabinet earlier this month. Yushchenko has refused to recognize the vote.

Oleg Palchikov, a representative of the company, said on Ukraine's Inter television on Monday night that the company had no connection with Mogilevich, and insisted that it was committed to openness and transparency. He also rejected allegations that the business lacked the financial backing and the contacts to become Ukraine's sole importer of gas, saying it had long-term deals with Gazprom and for Central Asian supplies.

First Deputy Prime Minister Stanislav Stashevskiy said experts were still working on the final document with RosUkrEnergo. "The document is still not ready ... it must be prepared in a proper way, that's why everyone is working on it," he was quoted as saying by Ukraine's Interfax news agency, reports the AP. I.L.