Medvedev hopes Ukraine will honor gas deal with Russia

Russian President Dmitry Medvedev said he hoped Ukraine would stick to the existing gas agreement with Russia and expressed Moscow’s readiness to discuss “various cooperation schemes” with Kiev that may result in a lower gas price for Ukraine.

“So far, there’s no conflict,” between Russia and Ukraine on the gas issue, Medvedev said in an interview with Euronews, “rather there are differences that might lead to various developments.”

Ukraine wants Russia to tear up a 10-year deal, agreed on by former Prime Minister Yulia Tymoshenko in 2009. Kiev says the deal set an excessively high price for Russian gas and forces it to import more gas than it needs.

“I hope that after all the recent experiences our close partners and friends must learn that you can’t torpedo existing contracts – even if you don’t like them,” Medvedev said. “It is completely unacceptable. All agreements, as long as they are not refuted in court or abandoned by the parties, must be carried out.”

Ukraine has threatened to slash gas purchases to 27 billion cubic meters of gas next year, down from 40 bcm this year, but Russian energy giant Gazprom said that under its ‘take-or-pay’ contract with Ukraine’s energy company Naftogaz Kiev has to pay for 33 bcm of gas regardless of the volume of purchases.

“I hope that our partners, our Ukrainian friends will likewise stick strictly to the framework agreement concluded in 2009,” Medvedev said.

He also reiterated that Russia was “willing to discuss various cooperation schemes” with Ukraine, including “advanced plans” based on Ukraine’s integration in the Customs Union.

Russia has rejected a proposal by Ukrainian President Viktor Yanukovych on Ukraine’s cooperation with the Customs Union of Russia, Belarus and Kazakhstan in a 3+1 format. Moscow says Ukraine should become a full member of the Customs Union if it wants to get a discount on Russian gas.

Gazprom has said a union entry would cut the country’s gas bill by $8 billion every year.

Medvedev said Russia could also discuss integration with Ukraine “based on some other approaches, including our investment in Ukraine’s economy or gas transport system.”

“If we can agree on this, we will probably be ready to consider change in the scheme of [gas] cooperation,” he said.

He added, however, that “the immutable principle remains” that gas cooperation is “always” based on a “universal” formula.

“Talk like ‘we’re paying more than other countries’ isn’t based on anything,” the president said. This is pure propaganda.”

The Russian-Ukrainian gas deal ties the price of gas to the price of oil, which had been rising steadily until recently, boosting Kiev’s bill.

“Ukraine pays by the same formula, and pays commensurate with the price paid by other European consumers,” Medvedev said. “Current prices are high, that’s true. But they can also be extremely low sometimes. And then it’s a problem for the energy supplier.”

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