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Yanukovych to discuss Ukraine's gas debt in Moscow

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Visiting Ukrainian Prime Minister Viktor Yanukovych will discuss his country's $1.3 billion gas debt to Gazprom at his first meeting with Russian Prime Minister Viktor Zubkov in Moscow on Tuesday.
MOSCOW/KIEV, October 9 (RIA Novosti) - Visiting Ukrainian Prime Minister Viktor Yanukovych will discuss his country's $1.3 billion gas debt to Gazprom at his first meeting with Russian Prime Minister Viktor Zubkov in Moscow on Tuesday.

The main purpose of Yanukovych's visit is to discuss arrangements for the next session of the Yushchenko-Putin interstate commission, but he will also "debate the further development of bilateral relations between Ukraine and Russia," the Kremlin said.

Alexei Miller, CEO of Russian energy giant Gazprom, and Ukrainian Fuel and Energy Minister Yuriy Boiko coordinated late on Monday a scheme for Ukraine's debt payment for Gazprom gas supplies after a new gas conflict sparked up a week ago.

Gazprom said last Tuesday it could reduce natural gas supplies to Ukraine in October if the country failed to settle its $1.3 billion debt. The Ukrainian government denied debt accusations saying that was not the government's debt, and that the sum had been exaggerated. Miller and Boiko agreed on Wednesday that Ukraine would repay its $1.3 billion gas debt by November 1.

Boiko also said the sum was owed by middlemen such as RosUkrEnergo and UkrGazEnergo, a joint venture established by RosUkrEnergo, the sole supplier of Russian gas to the country - and 50% owned by Gazprom - and Ukraine's oil and gas company Naftogaz.

Kommersant, a leading Russian business daily, said that under the scheme Ukraine must return to Gazprom 5 billion cubic meters of gas worth $650 million from its underground storage facilities, and another $650 million must be paid in cash at the expense of loans taken by UkrGazEnergo, and, possibly, RosUkrEnergo.

A source in the Ukrainian government was quoted by Kommersant as saying that the recent debt issue could have been Gazprom seeking to weaken Ukraine's position ahead of negotiations regarding 2008 gas prices, or else attempting to gain a larger share of the neighboring gas market.

The gas price for Ukraine rose from $95 to $130 per 1,000 cubic meters in 2007 after a price rise for Turkmen gas Russia re-exports to Ukraine. In 2008, gas could appreciate further to $143-$180.

The EU said on Wednesday it would hold a meeting in mid-October in which it would invite both Ukrainian government and Gazprom officials to clarify the situation.

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