Ukraine PM calls for fresh start with Russia

Ukraine's new Prime Minister Mykola Azarov yesterday called for a fresh start in ties with Moscow as he met his Russian counterpart Vladimir Putin for talks aimed at winning lower gas prices.

"I am calling on you to forget what has been between our countries in the past five years and start our relations with a clean slate," the Interfax news agency quoted Mr Azarov as telling Mr Putin at the start of the talks.

Yesterday's meeting is the first talks between heads of governments since Ukraine's pro-Russian politician Viktor Yanukovych was elected President last month and comes after Mr Azarov's talks with Russia's gas giant Gazprom.

Mr Putin sounded optimistic about the prospects of economic cooperation, saying it was a "very good sign" that Mr Azarov chose Moscow for his first foreign trip in his current capacity.

"I hope we will manage to build constructive trade and economic ties that will be beneficial to our nations and strengthened by a good political foundation and a desire to cooperate with each other constructively," the Russian RIA-Novosti news agency quoted Mr Putin as saying.

Gas supply and pricing have been a source of dispute between Moscow and Kiev. A spat in January 2009 led to Russia turning off the taps to Ukraine, which in turn left many European countries short of gas.

Ukraine, a key transit nation for Russian energy supplies to Europe, wants Moscow to cut by a third the price of natural gas, which now stands at $305 (€229) per 1,000 cubic metres as the two neighbours seek to put their ties back on track after years of acrimony.

The meeting at Mr Putin's Novo-Ogaryovo residence was off limits to most foreign news agencies but is expected to be keenly watched in Europe, which gets a quarter of its gas supplies from Russia, most of it via Ukraine.

Ahead of his Moscow visit, Mr Azarov called the current gas prices "unjustifiably high."

Mr Yanukovych said earlier this week he wanted to have a new gas contract in place before Russian President Dmitry Medvedev's visit to Ukraine in mid-May.

Russia, which observers say expects major concessions from the new government, has long eyed a stake in Ukraine's vast Soviet-era network of pipelines which also takes gas into western Europe.

Mr Yanukovych's predecessor Viktor Yushchenko ruled out any such pipeline deal but Mr Yanukovych has said a three-way arrangement involving Ukraine, Russia and the EU is possible.

Russian business daily Kommersant, citing sources, said earlier yesterday Moscow was set to press Ukraine's government to revisit the redistribution of property carried out under Mr Yushchenko when Russians lost lucrative assets in Ukraine.

A new gas agreement would lead to multi-billion dollar losses for Gazprom so Russia would not be satisfied with a mere invitation to join the pipeline consortium, the report said. Mr Putin's spokesman Dmitry Peskov denied Russia was seeking to obtain major concessions from Ukraine.

"Russia will not demand anything," he said. "There will be normal constructive talks."

Mr Azarov's government said after the talks the new gas prices for Ukraine would depend on the volumes of gas Kiev buys from Moscow, among other factors. It did not elaborate.