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Ukraine Asks Russia for Lower Gas Price08/28 06:14

   MOSCOW (AP) -- Emboldened by a deal with international creditors to write 
down part of its debt, Ukraine on Friday asked Russia for lower gas prices for 
the winter season.

   Gas disputes between Russia and Ukraine have led to cut-offs of supply in 
the past, and one standoff in 2009 caused serious disruptions in gas flowing 
from Russia via Ukraine to the European Union.

   Russia and Ukraine last year struck an emergency deal on prices through the 
winter. That deal has expired, however, and the sides have to hold new talks if 
Ukraine is to receive more Russian gas.

   Prime Minister Arseniy Yatsenyuk said on Friday he is convinced that Kiev 
and Moscow should go back to the last winter deal, which saw Ukraine pre-pay 
for gas but receive a sizeable discount.

   "We are convinced that the only mechanism to ensure a gas transit to the EU 
as well as stable supplies to Ukraine is applying the same mechanism that was 
worked out last year between the EU, Ukraine and Russia," he said in comments 
released by his press office.

   Under a deal reached last November, Ukraine agreed to buy gas from Russia at 
$385 per 1,000 cubic meters. On top of that, Russia offered a 30 percent 
discount of the contract price, which was worth up to $100 off per 1,000 cubic 
meters, depending on the fluctuations in global energy prices.

   The Ukrainian government on Thursday reached a deal with its international 
bondholders to lighten its public debt burden. It will see the creditors write 
off 20 percent of their bond holdings, shrinking $19 billion in sovereign debt 
to $15.5 billion.

   Russian creditors did not take part in talks, but Ukrainian Finance Minister 
Natalie Jaresko on Thursday insisted that Moscow should accept the same terms 
because "it would not get a better deal" than Ukraine's other creditors.

   Moscow insists that it wants to be fully repaid for a $3 billion loan it 
gave to Ukraine. The debt is due at the end of the year.

   Speaking to reporters late Thursday, Russian Finance Minister Anton Siluanov 
noted that Russia's loan "was not a commercial one. We provided funds for 
Ukraine with a below-market interest rate."


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