Russia mulls long-term gas discount for Ukraine

Russian President Vladimir Putin instructed the government Wednesday to formulate measures that will keep the proposed gas discount to Ukraine for a certain period of time.
"I would ask the government and prime minister (Dmitry Medvedev) to think about how these conditions could be stipulated at the government level ... make them absolutely reliable and unchanging for some time," Putin told a government meeting.
He said the conditions proposed by Russia's energy giant Gazprom to Kiev were "absolutely identical" with those to ousted President Viktor Yanukovych's government, which was 100 U.S. dollars lower than the contract price.
Meanwhile, Putin said "our Ukrainian partners seem to find that these discounts are not enough and they want more."
"It's unclear on what grounds ... if it's so, they are apparently deliberately taking the situation into a deadlock," the Interfax news agency quoted him as saying.
Russian Prime Minister Dmitry Medvedev, for his part, said the government will draft proposals "that will mean the long-term character of discounts."
He said Russia was ready to offer the discounts despite the fact that they "have a certain toll on us, and a quite painful one."
Meanwhile, if Kiev does not pay its gas debt, Medvedev said, "what it has paid could at any moment turn into an advance form of payment, and then Russia and Ukraine will go to a different stage of relations on the gas issue."
The government meeting came on the same day representatives from Russia, Ukraine and the European Union gathered in Brussels for gas talks.
Ukrainian Energy Minister Yuri Prodan said his government was not satisfied with Russia's proposal, saying "I want to refer this issue to the Stockholm court of arbitration," RIA Novosti news agency reported.
European Energy Commissioner Gunther Oettinger said the proposed 385-dollar per 1,000 cubic meters "can be considered acceptable," but said the proposal should also envisage further price reduction in certain conditions.
In 2010, Russia and Ukraine signed a gas-for-fleet agreement, under which Moscow offered a discounted gas price in exchange for extending its lease of its Black Sea fleet facility in Crimea for another 25 years.
In April, Moscow declared the pact no longer valid as Crimea joined Russia in March.Following the announcement, Gazprom canceled discounts on gas supplies to Ukraine and set a price of 485 dollars per 1,000 cubic meters, which Kiev called overpriced and temporarily suspended gas imports.