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Yanukovych May Ignore Gazprom-Naftogaz Merger Proposal

Ukrainian Energy Minister Yuri Boiko, left, and Oettinger talking to reporters Thursday after a meeting in Brussels. Geert Vanden Wijngaert

Ukraine might not consider a proposal by Prime Minister Vladimir Putin to merge Gazprom with Naftogaz Ukrainy, Ukrainian President Viktor Yanukovych said Thursday.

"[Putin's offer] was an unexpected step for Ukraine, and it does not mean that this question will be considered by Ukraine and resolved," Yanukovych's press service quoted him as saying.

Putin proposed last week to merge the two state energy companies, to the surprise of the Yanukovych leadership and industry experts.

Since Gazprom dwarfs Naftogaz, a merger could essentially give Russia control of Ukraine's gas pipelines and the transit of gas through Ukraine to Europe. About 20 percent of the gas consumed in the European Union is transported across Ukraine.

In his first public reaction to the proposal Wednesday, Yanukovych said the European Union, as Russia's top gas consumer, should have a role in modernizing Ukraine's pipelines.

"If we decide to begin talks [about a merger] we should involve the EU at a certain stage as the main consumer of gas and the main partner," he said.

But the European Union's energy chief said Thursday that the bloc would play no part in the proposal, because the decision is up to Moscow and Kiev.

"It's an offer and proposal from Mr. Putin [and] the decision has to be made between Kiev and Moscow, and not in Brussels," European Energy Commissioner Guenther Oettinger told reporters.

(Reuters, AP)

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