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    Putin says Gazprom waives fine for Ukraine's low gas intake

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    Russia's prime minister said on Wednesday that energy giant Gazprom would waive the $2 billion fine it is entitled to demand from Ukraine for failure to buy the contracted volume of natural gas. "These sanctions will not be taken," Vladimir Putin told reporters after talks with his Ukrainian counterpart, Yulia Tymoshenko.

    MOSCOW, April 29 (RIA Novosti) - Russia's prime minister said on Wednesday that energy giant Gazprom would waive the $2 billion fine it is entitled to demand from Ukraine for failure to buy the contracted volume of natural gas.

    "These sanctions will not be taken," Vladimir Putin told reporters after talks with his Ukrainian counterpart, Yulia Tymoshenko.

    Putin said Russia was counting on Ukraine to continue to pay for Russian natural gas supplies on time.

    Payments "are now coming in regularly and without interruption," Putin said, expressing the hope that "this will continue in the future," he said.

    Gazprom, however, expressed concerns on Wednesday over Ukraine's ability to pay for gas.

    "Now that we have switched to market relations with all the former Soviet republics, gas will not be sold on credit. In this respect, we are concerned over the situation in Ukraine, taking into consideration its low ability to pay and political instability," said Viktor Valov, deputy head of the gas monopoly's department for contacts with former Soviet republics.

    On payment of gas intended for storage facilities rather than consumers, Tymoshenko proposed that Moscow pay in advance for the transit of the gas, allowing Ukraine to use the receipts to pay the costs of pumping gas into its underground reservoirs.

    "The Ukrainian side has proposed signing an intergovernmental agreement whereby [Russia] would pay in advance for [Ukraine's] transit services, a scheme that we will be able to use to cover the costs involved in the pumping of gas into underground storage facilities," the Ukrainian premier said.

    Tymoshenko also assured Putin that modernizing Ukraine's gas transit system would be impossible without Russia's participation.

    An agreement between the European Union and Ukraine to modernize the former Soviet republic's gas pipelines raised tensions between Kiev and Moscow last month, with relations already strained following the gas dispute at the start of the year that disrupted Russian energy supplies to Europe in January.

    "We certainly see Russia and Gazprom as partners in modernizing Ukraine's gas transit system. This work cannot be completed without Russia," Tymoshenko said.

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