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Kiev, Moscow agree on new gas price

Nov. 16, 2011 at 9:11 AM

KIEV, Ukraine, Nov. 16 (UPI) -- Cash-strapped Ukraine has brokered a new price for natural gas with energy-rich Russia, a source inside the Ukrainian government said Wednesday.

The Ukrainian economy was left in shambles by the economic recession that struck world markets in 2008, leaving Kiev looking for help from international lenders.

Kiev blames former Prime Minister Yulia Tymoshenko for contributing to the economic calamity when she helped broker a 2009 gas deal with Russian gas company Gazprom. Gas prices from that deal are around $400 per thousand cubic meters, though it returned supplies disrupted over contract issues with Gazprom.

Tymoshenko is serving a seven-year prison term on charges she abused her power in the Gazprom deal.

A source inside the Ukrainian government told the Interfax news agency both sides were busy hammering out the technical details of a new agreement.

"We have agreements about a new price of gas," the Ukrainian official said on condition of anonymity. "Relevant documents are to be signed soon."

Russian President Dmitry Medvedev in August said Ukraine could get a better deal if it joined the Moscow-led Customs Union. Kiev said it didn't want to become a full member, however, because it would interfere with free-trade deals with the European Union.

Brussels has stepped away from Kiev because of the Tymoshenko issue, saying the charges were politically motivated.

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