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    Wrap: Russia, Ukraine agree on gas, discuss NATO

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    Moscow and Kiev reached an agreement on gas supplies and also discussed Ukraine's plans to join NATO during talks in the Russian capital between the two countries' presidents on Tuesday.

    MOSCOW, February 12 (RIA Novosti) - Moscow and Kiev reached an agreement on gas supplies and also discussed Ukraine's plans to join NATO during talks in the Russian capital between the two countries' presidents on Tuesday.

    GAS FIRST

    Gazprom said on Monday that it had postponed until Tuesday evening its deadline for Ukraine to pay its $1.5 billion natural gas debt, after which the Russian energy giant had threatened to begin to reduce supplies.

    "We have worked out a general short-term roadmap. We heard our partners say today that the debt will soon be paid off, and we agreed on the principles for cooperation in 2008 and consecutive years," Russian President Vladimir Putin told a news conference.

    Ukrainian President Viktor Yushchenko said that he expected that 2007 prices would be used to calculate his country's gas debt, referring to $179 per 1,000 cubic meters. "We should pay it off," he said, adding that the first installment would be paid on Thursday.

    Yushchenko also said Ukraine's national oil and gas company, Naftogaz, and Russia's Gazprom had agreed to set up a working group to make bilateral relations in the gas sphere more transparent.

    "We have agreed for Gazprom and Naftogaz to set up a working group that should soon develop schemes for establishing more direct, transparent relations on the [gas] market," the Ukrainian leader said.

    Oleh Dubyna, Naftogaz CEO, said intermediaries would not be used for Russia's natural gas deliveries to Ukraine.

    "Gas will be supplied [directly] by Gazprom to Natfogaz," Oleh Dubyna said.

    Swiss RosUkrEnergo currently has a monopoly on Russian gas supplies to Ukraine. Naftogaz, which buys gas from import monopoly UkrGazEnergo, earlier said it wanted to reject the services of both its joint venture with RosUkrEnergo and RosUkrEnergo itself. Gazprom holds 50% in RosUkrEnergo and a 25% stake in UkrGazEnergo.

    In a recent speech at a meeting with senior diplomats from EU countries, Ukrainian Prime Minister Yulia Tymoshenko said, "We propose switching from January 1, 2008 to at least one intermediary, RosUkrEnergo, and getting rid of UkrGazEnergo, which does nothing but shuffle papers, rubber stamp [proposals] and deprive Ukraine of extra money."

    UKRAINE-NATO COOPERATION

    Commenting on Ukraine's bid for NATO membership, Putin said it was the country's internal affair, but called on Kiev to think about the consequences of the move.

    In January, Yushchenko, Prime Minister Yulia Tymoshenko and Arseniy Yatsenyuk, speaker of the Supreme Rada, Ukraine's parliament, sent a letter to the alliance's Secretary General Jaap de Hoop Scheffer expressing their hope that the country could join an action plan for NATO membership.

    Opposition parties have been blocking the Ukrainian legislature for around a month in protest against the government's bid to join NATO.

    "Joining NATO means Ukraine having its sovereignty limited. If Ukraine wants its sovereignty restricted, it is the country's own business," Putin said.

    Referring to U.S. plans to deploy missile defense elements in Europe, the Russian leader said, "We believe that they are aimed at neutralizing our nuclear missile capability, which means Russia is faced with the necessity of responding."

    At a news conference in Geneva earlier in the day, Russian Foreign Minister Sergei Lavrov said, "We have the technical capability for an appropriate response that would not be a crippling burden on Russia's economy, but obviously it would be better to avoid this."

    "It is terrifying even to think that in response [to Ukraine allowing anti-missile defenses to be deployed on its territory] Russia could target its nuclear missile systems against Ukraine. This is what worries us," Putin said.

    Yushchenko assured Putin that his country's cooperation with NATO was not aimed against any country, and Russia least of all.

    "Nothing Ukraine is doing in this direction is meant against any third country, certainly not against Russia," the Ukrainian president said.

    He said Kiev realized only too well that Ukraine-NATO partnership was creating a number of sensitive issues that would have to be discussed with all of the country's partners.

    URANIUM AND MORE

    The two presidents reached an agreement to consider Ukraine joining the international uranium enrichment center in Angarsk, East Siberia, which will operate under the supervision of the International Atomic Energy Agency (IAEA).

    Russia and Ukraine also agreed to enhance cooperation between Russia's state-run arms exporter Rosoboronexport and its Ukrainian counterpart UkrSpetsExport in foreign markets. Moscow and Kiev will also encourage the establishment of joint ventures to produce, repair, modernize and service armaments and military hardware.

    The two parties also agreed to draft an agreement to regulate intellectual property rights and an intergovernmental program for state support to companies implementing projects in high-technology and for the resumption of production of the An-124 Ruslan high-capacity aircraft.

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