Putin to talk gas with recession-hit Ukraine
March 4, 2013, 2:19 pm

The visit by Putin is crucial for Ukraine as the country is seeking an international bailout to save its economy [Getty Images]

“The sides will discuss bilateral cooperation issues, including energy,” Putin’s spokesman Dmitry Peskov said.

Ukraine needs Russia’s aid in participating in a consortium to manage the country’s gas transportation system.

Ukraine is the key transit country for Russian pipelines transporting Russian gas to Europe.

The visit is crucial for Ukraine as the country is seeking an international bailout to save its recession-hit economy.

The International Monetary Fund (IMF) requires lower energy subsidies as a condition for aid.

The two sides are also expected to discuss the issues of gas pricing on earlier deals.

Earlier this year Russia’s Gazprom sent a $7 billion bill to Ukraine’s state-run gas firm Naftogaz as compensation for having imported less gas than the minimum “take or pay” clause stipulated.

Ukraine has not covered the bill and seeks to trim the price it pays for fuel supplies.

Ukraine has been pushing for a renegotiation of the gas agreements signed in 2009, this would allow them to lower the amount of gas imported by 20 per cent without being subject to any penalties.

The gas deal was brokered in 2009 by then-prime minister Yulia Tymoshenko, who is currently jailed and charged with abuse of power stemming from that agreement.

Ukraine also believes it is paying a higher price for the Russian gas than European states. Viktor Yanukovych earlier said the gas contract severely damages Ukraine’s economy and “places a burden on each citizens of Ukraine.”

“It is killing us,” he told a press conference in the Ukrainian capital of Kiev on March 1.

He also said that he does not blame Russia for signing the gas deal.

Daria Chernyshova