Parliament moves delay Ukraine gas deal
(Reuters)
Updated: 2006-01-22 12:37

Ukraine has delayed signing a new contract to buy Russian gas pending final agreement of terms including pricing and because of the Kiev parliament's attempts to scuttle the deal, the prime minister said on Saturday.

A Ukrainian worker operates valves at the main pipeline in the village of Boyarka, near the capital Kiev, January 3, 2006. [Reuters]

Premier Yuri Yekhanurov said Ukraine would aim to sign the deal with Russian gas giant Gazprom next Wednesday. Agreed on Jan. 4 following a standoff with Moscow that saw supplies suspended, the accord will almost double the price of gas.

"Unfortunately, we were unable to get the documents ready ... The first question is the price of gas, how prices are established and how long they are to remain in place," Yekhanurov said in comments broadcast on Ukrainian television.

He said the government also needed to determine whether ministers were in a position to sign the deal after being dismissed by parliament.

Clinched in the heat of a parliamentary election campaign, the gas contract was denounced as a betrayal of national interests by President Viktor Yushchenko's rivals.

Parliament sacked the cabinet within days, plunging Ukraine into constitutional deadlock, with Yushchenko insisting his government would remain in place ahead of March's election.

A further resolution this week demanded a new agreement and dismissed ministers and officials linked to the original deal.

"A legal opinion is needed on a lot of issues. When will this resolution be published, and what will it look like?" Yekhanurov said on Fifth Channel television.

"At issue here is the competence of both sides. Who can sign the deal? Who isn't empowered? Might there be consequences?"

Yushchenko has said nothing about parliament's latest move. An official in his administration said on Friday the president would soon act within the constitution to resolve the situation.

PRESIDENT'S ALLIES TRAIL IN POLLS

Polls ahead of the March 26 election to an assembly with expanded powers give the lead to the Regions Party of Viktor Yanukovich, the rival Yushchenko defeated in the long 2004 "Orange Revolution" presidential campaign.

Fighting for place second are Yushchenko's Our Ukraine Party and a group led by Yulia Tymoshenko, the president's former ally, who was sacked as prime minister last September.

The gas accord ended a row between Moscow and Kiev which culminated in Gazprom briefly switching off supplies to Ukraine. That also halted 80 percent of deliveries to Europe, which gets around a quarter of its gas from Russia.

Ukraine will now pay $95 per 1,000 cubic metres of gas this year, compared with $50 under previous deals subsidising supplies in return for Ukraine's services in gas transit. Gazprom had originally sought price rises of up to $230.

Investors have criticised Gazprom and its Ukrainian counterpart Naftogaz for using intermediary RosUkrEnergo to supply gas, saying the group has a dubious structure.

Yekhanurov acknowledged on Saturday that more explanation was needed on the structure and role of RosUkrEnergo.

He also said Fuel and Energy Minister Ivan Plachkov, one of the officials dismissed by parliament, would hold talks in Moscow on Sunday with Saparmurat Niyazov, the president of the ex-Soviet central Asian state of Turkmenistan.

Ukraine signed a separate deal just before New Year with Turkmenistan, its second gas supplier, to buy gas at $50 per 1,000 cubic metres.