Russia, Ukraine to sign "fleet for gas" deal

08:27, January 19, 2011      

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Finance Ministers from Russia and Ukraine were preparing to draft an agreement extending the lease of Ukraine's Sevastopol port to Russia's Black Sea Fleet, local media in Moscow reported Tuesday.

According to the new agreement, Sevastopol, home base of the Russian fleet, will be leased to Russia for another 25 years after it expires in 2017 in exchange for a 30 percent discount on Russian natural gas.

"We should establish the gas discount as a source of payment for the lease of the Black Sea Fleet's base in Sevastopol after 2017," Russian Finance Minister Alexei Kudrin told local media after his meeting with Ukrainian counterpart Fyodor Yaroshenko.

"The agreement will be drawn up within two months," Kudrin added.

The specific parameters would depend on the amount of gas supply and prevailing prices, which would determine the amount of the discount, Kudrin said.

According to the preliminary agreement on the extension of the lease signed by the two countries' presidents in April 2010, Ukraine will receive a discount of 100 U.S. dollars per 1,000 cubic meters on natural gas, if the price is not below 330 dollars. But if the price goes below 330 dollars, the discount will stand at 30 percent.

Yaroshenko said the two countries would take "very quick and constructive" steps toward to the signing of agreement.

"It's important to determine the unified methodology which will be implemented in real life, and we have agreed that the steps will be quick," he said.

The two ministers also signed a memorandum of cooperation between the two countries.

Source: Xinhua
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