Moscow, Kiev yet to solve tricky gas issue

August 11, 2011. President Dmitry Medvedev, right, and his Ukrainian counterpart Viktor Yanukovych meet at the Bocharov Ruchei residence (RIA Novosti / Vladimir Rodionov)
Russian-Ukrainian gas cooperation is a complicated issue and requires further discussion, President Dmitry Medvedev has said during an informal meeting with his Ukrainian counterpart Viktor Yanukovich in Sochi.

­“Gas cooperation is a complicated question but we can’t escape it,” Medvedev said while opening the talks.

Prior to the meeting at the Russian Black Sea resort city, Yanukovich told journalists that he was hoping to find a compromise over the price of gas for Ukraine.

"We shall certainly discuss this matter. I believe that it is in the interest of both Ukraine and Russia to find a compromise solution, and we shall seek it," Yanukovich said, cited Itar-Tass. The agency also recalls that earlier in May, during his meeting with Gazprom CEO Aleksey Miller, the Ukrainian leader noted that the gas agreement signed in 2009 was "unsuitable in relation to Ukraine." Kiev believes that Ukraine should pay a lower price compared to other European states given, in particular, the shorter distance between the two former Soviet republics.

The current Russian-Ukrainian contracts for gas supplies were signed in 2009 by Prime Minister Vladimir Putin and the then Ukrainian premier Yulia Timoshenko. She is now standing trial for concluding deals with “enslaving terms” prosecutors say. Last week Ukraine’s current prime minister, Nikolay Tigipko, stated that Kiev has considered the possibility of cancelling the deal in court. However, President Yanukovich would later go on to say that the parties should settle the dispute out of court.

According to the agreements, the price Ukraine pays for gas is linked to world oil prices, which have continued to rise throughout the year. In the first quarter it was 264.3 dollars for 1,000 cubic meters, while in the second quarter it had risen to 295.6 dollars. By the third quarter, it had surged by 20% up to 354 dollars. Kiev insists that 200 dollars per 1,000 cubic meters would be a fair price.

During the meeting both presidents were hopeful that this, as well as other problems, would be settled.

“We should also think about the final solution to the state border problem,” Dmitry Medvedev stated, raising another sensitive issue. “I think we should talk frankly, openly and in a friendly manner, as always.”

They also touched upon integration within the CIS.

“We are ready to consider a format for Ukraine’s integration,” Viktor Yanukovich noted.

As expected, a key topic of the meeting was the preparation of the bilateral inter-state commission.

“We have agreed that the commission should be a top-level event in every sense of the word,” president Medvedev said.

It was earlier reported that a meeting of the inter-state Russian-Ukrainian commission co- chaired by both leaders was to take place in Moscow this past July, though this information was later proven to be false. The event will presumably be held in September.

During Thursday’s informal meeting in Sochi, the Ukrainian leader invited Medvedev to watch the final match of the 2012 European Football Championship in Kiev.

“I think it will be a pleasure for everyone,” Viktor Yanukovich said.

“If our teams perform well,” added Dmitry Medvedev. “There are some problems with our teams.”

The Ukrainian leader also thanked his Russian counterpart for the opportunity to have a look at preparations for the 2014 Winter Olympics in Sochi. Given Ukraine’s bid to host the 2022 Olympic Games, “this experience is very important for us”, Yanukovich observed.

­