You're reading: Ukraine, Russia give no sign of gas dispute end

MOSCOW (AP) — As a new natural gas dispute between Russia and Ukraine brews, the countries' foreign ministers are giving no signs that a resolution is close.

Ukraine last week announced that it wants to renegotiate a contract it signed in 2009 for Russian natural gas, saying the price is ruinous for the Ukrainian economy. Ukraine relies on Russian gas for its heavy industries and long had benefited from below-market prices. The latest contract roughly doubled the price for Ukraine; it now pays about $355 per 1,000 cubic meters.

The dispute is likely to raise alarm in Europe, where memories of unheated homes in the depths of winter during a 2009 pricing war between Moscow and Kiev are still fresh. Customers across Europe experienced energy supply interruptions after Russia cut off gas supplies to Ukraine, whose pipelines carry Russian gas westward.

Ukrainian Foreign Minister Konstantin Grishchenko, after meeting Monday with his Russian counterpart Sergey Lavrov, said Ukraine hopes for a solution through talks rather than taking the matter to international arbitration.

Lavrov in turn said "we are guided by the universally accepted principle of respect to international obligations, including contracts and inter-government agreements."

Ukrainian Prime Minister Mykola Azarov said last week that the 2009 contract, signed by his predecessor Yulia Tymoshenko, contradicts a 2004 intergovernmental agreement between Moscow and Kiev and thus must be revised.

Ukrainian prosecutors contend the 2009 contract violated the law and have put Tymoshenko, now the country’s top opposition leader, on trial on charges of abuse of office. She denies the allegations as an attempt to bar her from politics and says signing the deal was the only way to end the gas war.

Azarov also said that Ukraine’s energy company Naftogaz will eventually be restructured into several smaller firms, which must then sign separate contracts with Russian energy giant Gazprom anyway.

Russia said it would revise the deal only in exchange for gaining control over Ukraine’s strategic gas transit network or for closer economic cooperation with Moscow, which would come at the expense of Kiev’s moves to integrate more closely with the European Union.