Reuters reported that Russian gas export monopoly Gazprom had made significant progress in talks with Ukraine, a key export market and transit route to Europe and hoped to agree on future supply terms by year end.
Gazprom gave the upbeat assessment in a statement after its chief executive Mr Alexei Miller met Ukrainian Energy Minister Mr Yuri Boiko for talks in Moscow on Wednesday.
Gazprom quoted Mr Miller in a statement as saying that "At the talks significant progress was achieved."
He said that "It can be expected that we will finalize agreements on the development of our cooperation in the gas sector by the end of the year."
Ukraine has been in talks with Russia for over a year in an attempt to negotiate a lower price saying it cannot afford the price it has to pay under a January 2009 deal struck after Russia cut off its western neighbor, disrupting supplies to Europe.
Ukrainian officials have warned that, under a contract formula linked to oil, the price Ukraine pays for gas imports could jump to $485 per thousand cubic metres from around $400 now, unless a new deal can be worked out.
Ukraine is already borrowing from Russia to pay for its gas officials have said and a new tranche of a USD 15 billion aid package from the International Monetary Fund is blocked because Kiev has not passed on gas price hikes to consumers.
Sources have said that in return for gas price concessions, Kiev may be willing to cede an ownership stake in its gas pipeline network to Gazprom, with a further stake earmarked for an energy company from the European Union.
Mr Gunther Oettinger EU Energy Commissioner was due in Moscow on Thursday for talks likely to focus on market rules opposed by Russia that would restrict gas producers from controlling pipeline infrastructure on the bloc's territory.
Russian gas exports cover around a quarter of the EU gas needs. Of that, 80% traverses Ukraine, with the remaining 20% going via Belarus which sold its pipeline network to Gazprom last week in return for a 40% price cut.
(Sourced from Reuters)
