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Ukraine president cautious about gas consortium with Russia

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Ukraine's president called Friday for a careful approach to proposals to merge Russian and Ukrainian gas assets into a consortium, and said it was premature to talk about specific figures.
KIEV, February 2 (RIA Novosti) - Ukraine's president called Friday for a careful approach to proposals to merge Russian and Ukrainian gas assets into a consortium, and said it was premature to talk about specific figures.

President Viktor Yushchenko's statement follows proposals to consider merging energy assets of the former Soviet allies, and the Russian leader's suggestion Thursday that Ukraine could be granted access to Russian oil and gas fields if it agreed to a gas consortium.

"We must discuss principles of organizing these [new] relations and implementing these initiatives, but I would not specify any percentages or stakes today because it is all still a distant prospect," Yushchenko said.

The president's comments contrast sharply with those made Thursday by his political rival, Prime Minister Viktor Yanukovych, who gave his broad support to the idea to merge Russia's vast hydrocarbon reserves and Ukraine's pipelines leading to Europe, Moscow's main customer.

The Western-leaning Ukrainian president said the country's gas pipeline system was its strategic asset, monopolized and run by the state under law. "Any modifications of this established model must be carefully considered," he said.

Although Prime Minister Yanukovych welcomed the merger initiative, he said it must be formed on a parity basis.

Ukrainian Energy Minister Yuriy Boiko said Kiev and Moscow were discussing ways of integrating in the energy sector on Ukraine's initiative, a process that Putin had described as "revolutionary" in his Kremlin conference.

Boiko said the current level of bilateral relations allowed such projects to be realized. "Ukraine has made a series of proposals to Russia, and we have already selected a model that will be further developed and improved," the minister said.

Relations between Russia and Ukraine dipped to their lowest after "the orange revolution" in Kiev in 2004, which swept President Yushchenko to power. At the beginning of 2005, a bitter gas price row erupted between the countries during which Russian gas monopoly Gazprom briefly turned off the gas taps to Ukraine amid freezing temperatures, sparking international criticism.

Ties between the neighbors have been restored since Yanukovych, Yushchenko's rival in the 2004 presidential race, became prime minister last August. The pro-Kremlin premier has steadily consolidated his power, a process that culminated in a new Cabinet law passed by parliament last month, cutting the president's powers.

Ukraine's gas pipelines stretch over 37,500 kilometers (23,306 miles), and include 71 pumping stations and 13 underground gas storage facilities of 32 billion cubic meters. The capacity of the Ukrainian pipes leading to Western Europe is 141 billion cubic meters per year.

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