Ukraine's Prime Minister in Moscow

As business paper Kommersant reported that the prime ministers of Ukraine and Russia could sign an agreement on gas supplies without intermediaries after negotiations today.

Ukraine currently pays $179.5 per 1,000 cubic meters for gas imported from Russia or via Russian territory. The supply scheme involves the Swiss trader RosUkrEnergo, in which Gazprom holds 50%.

Kiev hopes that the gas price will not exceed $300 in 2009, while the Ukrainian budget for next year is based on a price of $250. However, Moscow does not rule out hiking the price to $400 from next year, the paper said.

According to Kommersant Ukraine, the premiers are expected to sign two documents during the negotiations - a memorandum on bilateral gas cooperation and an agreement on the basic terms of further gas relations.

As RIA Novosti announces, under the first document, a general agreement, the parties will give up any gas intermediaries and switch to direct relations involving Gazprom and Ukraine's national oil and gas company Naftogaz. Also, Naftogaz will receive the right to re-export gas to the European Union jointly with Gazprom. The parties will pledge to guarantee uninterrupted gas supplies to consumers, the paper said.

The second document is more advantageous for Gazprom. Under the draft, the parties are expected to set prices on market rather than contractual terms. The price will be indirectly linked to the world oil price.

Also, Naftogaz will undertake to repay as quickly as possible Ukraine's $1.8 billion debt to Gazprom for gas supplied in 2008 and return to the Russian energy giant 11 billion cubic meters of natural gas pumped into Ukrainian underground storage facilities but not paid for, the paper said.

Author: Ksenia Kochneva