The European Union should be part of any talks between Kiev and Moscow to merge their national gas companies, Ukrainian President Viktor Yanukovych said Wednesday.
The comment, Yanukovych's first public reaction to Prime Minister Vladimir Putin's proposal last week, could upset Moscow, which wants to sideline the EU from the process.
"If we decide to begin talks [about the merger] we should include the EU at a certain stage as the main consumer of gas and the main partner," Yanukovych said.
"The most important thing for Ukrainian national interests is that its gas-transportation system is reliable," he said. Ukraine can upgrade its pipelines to pump as much as 200 billion cubic meters per year within five years, up from 120 billion cubic meters now, he added.
Putin proposed last week merging Gazprom and Naftogaz Ukrainy, to the surprise of industry experts and outcry of Ukrainian opposition.
The move could give Moscow control over Kiev's gas transit network, which ships a fifth of Europe's gas consumption and has been a headache for the Kremlin in past years when Kiev suspended supplies during pricing disputes.
Putin's spokesman, Dmitry Peskov, said last week that the deal would most likely take the form of an equity swap between the two firms. Gazprom may use about 5 percent of its own shares to acquire Naftogaz, Kommersant reported Tuesday, citing Peskov.
Some industry experts have said Putin is taking advantage of the Greek crisis, which is dominating the EU's attention and efforts, to quietly take control of Ukrainian gas pipelines.
Ukrainian Prime Minister Mykola Azarov told reporters in Kiev that any unification of Gazprom and Naftogaz Ukrainy must be mutually beneficial.
He also said Kiev would seek to decouple the price it pays for Russian gas supplies from international oil prices after gaining a discount on supplies and easing contract terms.
“We have achieved a lot. We got rid of fines and the take-or-pay principle,” Azarov said. “They understood we aren’t happy with this formula.”
Naftogaz said Wednesday that it paid more than $419 million for April gas imports from Russia, which included a discount of $100 per 1,000 cubic meters of fuel.
(Bloomberg, Reuters)