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Last Updated: Thursday, 10 August 2006, 17:09 GMT 18:09 UK
New Ukrainian PM backs gas deal
Viktor Yanukovych
Viktor Yanukovych says he wants the best deal for Ukraine
Ukraine's new prime minister has insisted that his government will honour its controversial gas supply agreement with Russia.

Viktor Yanukovych - defeated in the 2004 presidential election - said he would not seek to repeal the deal.

Ukraine agreed to almost double what it pays for its neighbour's gas this year, after a bitter price dispute which saw Russia cut off supplies for three days.

Former Prime Minister Yulia Tymoshenko has called for the deal to be reviewed.

Securing supplies

I have never said we are going to change or review anything
Viktor Yanukovych, Ukrainian Prime Minister

Mr Yanukovych - who is seen as being closer to Moscow than President Viktor Yushchenko - has taken a different view.

He said he would use a visit to Moscow in a few days time to "secure adequate gas supplies and optimal gas prices for our country".

"I have never said we are going to change or review anything," Mr Yanukovych said in his first formal news conference since he was approved as prime minister.

Ukraine, which imports most of its gas from Russia, is now paying $95 per 1,000 cubic metres for its gas - compared to $50 this time last year.

Deal threatened

There is lingering dissatisfaction with the agreement on both sides, with Russia wanting to raise prices further.

Russian gas monopoly Gazprom wanted more than $200 per 1,000 cubic metres, but eventually agreed to mix its gas with cheaper supplies from Turkmenistan.

It now delivers the gas via a deal with an intermediary firm, RosUkrEnergo.

Turkmenistan has threatened to limit its deliveries to Gazprom unless it is paid more for its gas, a move which could threaten the Ukraine deal.

Moscow has claimed that the terms of the agreement could be renegotiated this summer, although Kiev has previously disputed this.

January's dispute between the two countries disrupted gas supplies to western Europe, prompting the European Union to review its approach to energy security.

Turkmen in gas warning to Russia
21 Jun 06 |  Business
Russia looks at oil control move
26 May 06 |  Business

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