Kremlin plays down chance of imminent gas deal with Ukraine


Kremlin plays down chance of imminent gas deal with Ukraine


MOSCOW -- The Kremlin Friday played down the chances of an imminent new natural gas deal with Ukraine after saying that Russian President Vladimir Putin will meet his Ukrainian counterpart Viktor Yanukovych in Moscow next week.

A spokesman for Mr. Putin said there would be no deals to sign following Monday's meeting, that was originally planned for December. Those talks were cancelled at the last minute, with both sides saying they needed to finalize documents.

"At the moment, the differences remain; work is continuing," the spokesman, Dmitry Peskov, told the Interfax news agency Friday.

Mr. Yanukovych has long sought a lower gas price from Russia, but has balked at the Kremlin's insistence that it would offer a discount only if Ukraine joined a Moscow-led Customs Union of former Soviet republics.

At a press conference Friday, Mr. Yanukovych hinted at a potential compromise deal that could allow Russia to rent Ukraine's pipeline, which carries over half of Russian gas supplies to Europe.

Ukraine says it needs a discount on Russian gas as high prices are choking its economy, which slipped into recession at the end of last year. Kiev is also looking to the International Monetary Fund for financial support from a potential new lending program. But Mr. Yanukovych has ruled out gas price rises for households, a key demand of the Washington-based lender.

The Moscow visit, announced on both the presidents' websites Friday, comes as Mr. Yanukovych also tries to balance his aim of closer ties with the European Union.

In Brussels this week, European leaders called on Mr. Yanukovych to carry out political and judicial overhauls by May to seal a landmark political and free-trade deal that would anchor the former Soviet republic in Europe. A key sticking point in these talks has been the incarceration of former prime minister Yulia Tymoshenko, Mr. Yanukovych's main political rival.

Dow Jones Newswires


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