Kiev Gas Executives Stop by Gazprom

Ukrainian energy executives met Gazprom chief executive Alexei Miller on Thursday as Ukraine's new government seeks to revise the terms of gas agreements with Moscow amid mounting debt.

Gazprom gave few details about the meeting between Miller and a team led by Oleg Dubina, the new head of Ukraine's state energy company, Naftogaz Ukrainy.

"It was a get-acquainted meeting," Gazprom said in a statement.

Ukrainian First Deputy Prime Minister Alexander Turchinov said Dubina was to raise the issue of intermediaries and higher fees for Russian gas transit at the talks, Kommersant reported.

In December, Gazprom agreed to increase charges for gas supplies to Ukraine by 38 percent, only weeks before the arrival of the new government, led by Yulia Tymoshenko.

Tymoshenko, who is wary of Moscow, promised to eliminate all intermediaries in gas trade with Russia soon after her appointment but refrained from tough action before the new year.

Media reports said Tymoshenko would arrive in Moscow for talks Wednesday in the first official visit since her appointment, but her office would not confirm that.

"We expect the negotiations to be no less difficult than in the past. In the meantime, we anticipate a lot of nervy newsflow on the topic," Deutsche Bank said in a research note.

Tymoshenko has long criticized the role of intermediary firm RosUkrEnergo, half controlled by Gazprom, as an opaque company that increases the cost of gas transit. She has said Gazprom needs to deal directly with Naftogaz.

Under the December deal, Gazprom will sell gas to Ukraine via RosUkrEnergo at $179.50 per 1,000 cubic meters in 2008 and pay Ukraine $1.70 per 1,000 cubic meters for the transit of gas per 100 kilometers, up from the previous $1.60.

Kommersant quoted industry sources as saying Ukraine wants to raise transit fee payments steeply -- to $9.32.

Gazprom declined to comment on the report but said it had registered a steep rise in debt from RosUkrEnergo.

RosUkrEnergo said in turn that its joint venture with Naftogaz, UkrGazEnergo, which sells gas in Ukraine, owed it $830 million for supplies of Russian gas.

Russia, which supplies one-quarter of Europe's gas needs, ships four-fifths of its exports to Europe via Ukraine. Europe closely watches gas price disputes between Kiev and Moscow, as they can lead to transit supply cuts.