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Gas dispute with Russia over - Ukrainian president

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KIEV, January 10 (RIA Novosti) - Ukrainian President Viktor Yushchenko said Tuesday he was satisfied with the gas agreement with Russia. "The agreement with Russia on gas supplies to Ukraine is absolutely acceptable, and the incident is over," Yushchenko told Polish Foreign Minister Stefan Meller, who arrived in the Ukrainian capital Kiev to discuss joint energy projects, including a possible venture to construct new gas pipelines across Ukraine.

The president's press service also cited Yushchenko as saying that Ukraine's relations with Russia "will soon recover."

Russia cut off supplies of gas to Ukraine for three days at the start of this month after talks over gas prices - which had lasted nine months - broke down amid Russian demands for a price rise from about $50 per 1,000 cu m to as much as $230.

Supplies were restored once the two sides had come to an interim agreement under which Ukraine will pay $95 per 1,000 cu m for its gas for the next six months. But the Ukrainian government remains under pressure at home, with critics saying that the deal could simply pave the way for Russia to hike prices again later in the year.

Opponents see particular cause for alarm in the fact that Ukraine will not be buying its gas directly from Russian gas export monopoly Gazprom, but instead from RosUkrEnergo, a Swiss-based joint venture. In spite of the lower sale price to Ukraine, RosUkrEnergo - owned half by Gazprom and half by Austrian bank Raiffeisen - will still pay Gazprom the $230 per 1,000 cu m that it was originally seeking.

European countries, many of which depend on Russia for the majority of their gas, are also keen to see a permanent agreement in place. Gas supplies to some central and eastern countries, including Poland, dropped sharply when Russia turned off the taps to Ukraine.

Ukrainian Prime Minister Yuriy Yekhanurov said earlier Tuesday that the negotiations with Russia had been difficult, but added that Ukraine was soon to submit a draft protocol for 2006 that would extend the expired 2001 gas agreement between the two countries.

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