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Ukraine, Russia to talk gas tariffs after Turkmen price hike

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Ukraine's acting fuel and energy minister said on Wednesday that talks with Russia on natural gas deliveries would resume shortly following a price hike for Turkmen gas.

Russia's natural gas monopoly Gazprom signed a deal with Turkmenistan on Tuesday fixing the price for gas it buys from the Central Asian country at $130 per 1,000 cubic meters for the first half of 2008; $150 for the second and in line with a "market price formula" as of January 1, 2009.

"We waited for [our] talks to end, and now we will continue them," Yuriy Boiko said.

The price increase will be passed on to Ukraine, which has bought Turkmen gas via Russia since early 2006, when Moscow raised the price of its natural gas deliveries to Ukraine to $230 per 1,000 cu m. In a compromise agreement, an average price for a mixture of Turkmen and Russian gas was set at $95 per 1,000 cu m.

After the Central Asian state increased the price of its gas to $100, the rate for Ukraine was raised to $130 per 1,000 cu m from January 1, 2007.

Turkmenistan said it raised tariffs following increases in global energy prices; the average price paid by the European Union is expected to hit $360 by the end of 2008. In addition, Ashgabat argued that Russia has also raised tariffs for ex-Soviet republics.

Russia and Ukraine have still not agreed on a gas price for 2008. Kiev had signaled it would be content to pay $160 per 1,000 cu m, however, this was prior to the latest price hike announced by Turkmenistan. - RIA Novosti

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