Azarov rules out Russia gas 'war'

Ukraine and Russia will avoid a gas showdown that could disrupt energy supplies to Europe, Ukrainian Prime Minister Mykola Azarov said on Friday after the sides argued publicly over gas contract terms, Interfax news agency reported. Previous rows between the ex-Soviet neighbours have briefly halted deliveries of Russian gas to European customers. An angry exchange between Kiev and Moscow on 2012 supply volumes this week prompted fears of a repeated war.

But Azarov played down such risks.

"Why should we fight a war with our Russian brothers?" Interfax quoted Azarov as saying on the eve of a fresh round of gas talks with Russia in Moscow.

"We are not even talking about it and never will."

"Of course, both of us have economic interests. They have a very good agreement and are holding to it with both hands. And we are telling them that there is also real life. We will reach an agreement," Azarov said.

Ukraine, which depends heavily on Russian gas supplies for its industry and utilities sector, has been trying unsuccessfully for over a year to persuade Moscow to review a 2009 deal which it says sets an exorbitant price for gas.

Ukraine pays $416 per thousand cubic metres this quarter and sees a fairer price at $250.

Fresh talks between the two sides are due to start in Moscow from Jan. 15.

Tension between Russia and Ukraine, which also tranships most of the volumes bound for Europe, rose this week as Kiev said it would cut imports to 27 billion cubic metres (bcm) this year from an estimared 40 bcm in 2011.

Russian gas export monopoly Gazprom says the agreed 2012 volume was 52 billion cubic metres.