Ukraine Sets Gas Offer, Wants No Middleman

Ukraine will insist on a price of $201 per 1,000 cubic metres of Russian gas for 2009, less than half Russia's proposal, and wants to scrap a controversial gas intermediary, the state energy company's head said on Wednesday.

Naftogaz head Oleh Dubyna told Reuters in an interview that Ukraine would only pay this price, up from $179.50 in 2008, if Russian gas monopoly Gazprom agreed to increase transit fees to $2.05 per tcm over 100 km from $1.70.

Gazprom has said it is raising the price Ukraine must pay to $450 per tcm, claiming Ukraine rejected earlier, lower offers.

Dubyna also said he wanted to scrap RosUkrEnergo, which in 2006 became the exclusive intermediary for Ukraine's gas imports. He said he wanted direct contracts between Naftogaz and Gazprom.

"I don't want to see anybody between us," he said.

"If I am offered to preserve RosUkrEnergo, I will never do it. That is my strong position -- someone else can do it. I would resign and I would never sign a deal with RosUkrEnergo."

Dubyna said Russian claims that Ukraine had shut down export pipelines to European customers were "absurd", as all gas taps were on Russian territory.

With temperatures in Kiev dropping below minus 20 degrees Celsius, Dubyna said the gas row had gone too far.

"When you look at the thermometer and see minus 24 degrees Celsius, you understand that God help us if the heating stoves stop working," he said. "When you think that your family may not have heat, your understanding of high-level politics ends.

"When you understand that this could lead to a big collapse then I do not understand such high-level politics," he said, adding that Russia and Ukraine would in the end come to a deal.

"We will in any case come to an agreement. We cannot exist without each other so let's not continue down this road anymore."

Dubyna will head a delegation to resume talks in Moscow with Gazprom Chief Executive Alexei Miller on Thursday. The Kremlin says it is ready for talks.