- The Washington Times - Thursday, December 29, 2005

MOSCOW — Ukraine said yesterday it may ask Western powers to intervene in a heated price dispute with Russia that could disrupt natural-gas supplies to Europe, as officials prepared for further talks to break the deadlock.

President Viktor Yushchenko chaired a Cabinet meeting in Kiev to consider the use of a 1994 nuclear disarmament pact to appeal to the United States and Britain for help in the dispute.

Mr. Yushchenko and his top ministers discussed “possible consultations with the States that in 1994 signed the memorandum on security guarantees” given to Ukraine in exchange for its renunciation of nuclear weapons, the president’s office said.

Kiev’s renewed reference to the 1994 nuclear disarmament agreement marked a significant raising of the political stakes surrounding the dispute.

With time running out ahead of a Sunday deadline set by Russia, Ukrainian Energy Minister Ivan Plachkov was dispatched to Moscow for another round of talks with Russian officials to try to break the impasse.

The meeting concluded late yesterday without an agreement but was expected to continue today, news agencies quoted Mr. Plachkov as saying.

He said there had been “movement in the negotiations” and that “compromises are possible.” Russian officials made no comment.

Russia angrily rejected Ukraine’s citing of the 1994 agreement as “having no basis.”

The agreement rules out threats of use of force or attacks on Ukraine’s territorial integrity and political independence, along with economic coercion aimed at subverting Ukrainian sovereignty, the Russian Foreign Ministry said.

“The shift to European prices for delivery and transit of gas can in no way be regarded as a threat to the realization of Ukraine’s sovereignty rights,” it said.

This was clear “since Ukraine itself has spoken in favor of a shift to market” prices, the ministry said.

Neither Washington nor London issued comment on the prospect that Ukraine might ask for help.

Russia’s state-run gas giant Gazprom has cast the argument as strictly commercial despite claims by Kiev that it is politically motivated.

Gazprom has said that, starting Sunday, it will begin charging Ukraine world market rates ranging from $220 to $230 per 1,000 cubic meters of gas, roughly the price it charges customers elsewhere in Europe.

It has threatened to cut off gas supplies to Ukraine from that date if no new pricing agreement is reached.

Ukraine, which currently pays $50 under a barter system held over from Soviet days, has agreed, in principle, to pay market prices, but wants them phased in over several years. It also has scoffed at the rates proposed by Gazprom, calling them “unacceptable.”

Russia has hammered home the point that Ukraine is a market-based economy — it was recognized formally as such by the European Union earlier this month — and says Gazprom has no obligation to continue giving the country preferential pricing for gas.

Despite Ukraine’s efforts to raise the stakes, analysts predicted the row would be resolved soon.



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