Yanukovych to ask gas question in Kazakhstan

Ukrainian President Viktor Yanukovych is heading to Kazakhstan to discuss possible gas supplies to Ukraine with his Kazakh counterpart Nursultan Nazarbayev.

The visit comes just two weeks after Ukrainian Prime Minister Mykola Azarov visited the Russian capital, Moscow, in an attempt to persuade his counterpart Vladimir Putin to reduce the price Ukraine pays for Russian gas, which is seen by the Ukrainian authorities as "unfair."

The agenda of forthcoming talks between Yanukovych and Nazarbayev remained under wraps until Tuesday. It was only known that the talks would see the signing of a number of bilateral agreements.

On Tuesday, during a meeting with Azarov dedicated to the 2010 draft budget plan, Yanukovych said the plan "burst at the seams" because of high gas prices.

Yanukovych, who came to power in February after narrowly winning a presidential runoff against then premier Yulia Tymoshenko, has been seeking to revise a long-term gas deal signed by Tymoshenko and Putin in early 2009.

After talks with Azarov on March 25, Putin said he did not view the Russian-Ukrainian contract on gas deliveries as "unjust" or "unbeneficial", but said talks on the issue were possible. The prime minister indicated, however, that Russia was not going to reduce gas prices at no expense for Kiev.

"If the question of reviewing prices is raised, then the question 'what for?' arises. We asked our colleagues what they are ready to offer in response," he said.

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In return for cheaper gas, Ukraine wants to offer Russia a stake in its gas transportation system, which currently accounts for about 80% of Russian natural gas exports to Europe.

Putin said after talks with Azarov Russia is positive about the idea of creating a consortium with Ukraine to modernize its gas transportation system and that it is ready to invest funds into the project. However, he said Russia and Ukraine would not directly link a reduction in prices with Russia's stake in the gas consortium.

Last year, Russia reduced its gas price for Ukraine by 20%, but in 2010 the market price, which fluctuates depending on oil prices, was introduced. In the first quarter of this year, Ukraine will pay $305 per 1,000 cubic meters of Russian gas. The price will grow to $320 in the second quarter due to rising oil prices.

Media reports have said Kiev would like gas prices to be nearly halved to $170 per 1,000 cu m. Meanwhile, the 2010 budget plan being prepared by the Ukrainian government stipulates the gas price of $334 per 1,000 cubic meters.

The Ukrainian prime minister earlier discussed cooperation in the gas sphere with Kazakh Foreign Minister Kanat Saudabayev, who visited Kiev in late March.
World media monitoring