A joint venture of Russian energy giant Gazprom and Ukrainian state oil and gas company Naftogaz will enable Ukrainians to buy Russian gas at the price of about $60 per 1,000 cu m, Gazprom CEO said.

Gas prices for Ukrainian consumers now vary from 725.4 hryvnas ($91.9) per 1,000 cu m to 2,954.1 hryvnas ($374.5) per 1,000 cu m.

"Gazprom's point of view is that we could set up a joint venture of Gazprom and Naftogaz of Ukraine... In this case, the Ukrainian population could buy gas at the price for Russian consumers. Gas prices in Russia are fixed by the state and now stand at 1,880 rubles per 1,000 cu m. It is slightly more than $60 per 1,000 cu m," Alexei Miller told the Vesti TV channel, RIA Novosti reported.

The Ukrainian government had to introduce a 50% increase in gas prices for individuals and heating enterprises from August 1, and plans a further 50% increase from August 1, 2011. The price hike was one of the conditions under which the country could receive a $15.15-billion loan from the International Monetary Fund.

While Gazprom CEO Alexei Miller said the companies should push for a joint venture, Russian Prime Minister Vladimir Putin proposed a merger, something that the Ukrainian opposition fears would put the country's sovereignty at risk.

A Ukrainian delegation headed by Ukrainian energy minister Yury Boiko, arrived in Moscow on Friday for talks with Gazprom management on gas issues.

"We are now conducting an intensive dialog to boost our cooperation, and various options are being considered. The key requirement is to find a solution to benefit the two companies and consumers of the two states," Boiko said.

In April, Russian President Dmitry Medvedev and his Ukrainian counterpart Viktor Yanukovych agreed during their meeting in Kharkov in east Ukraine that Russia would grant Ukraine a 30% discount on the gas price of $330 per 1,000 cu m over the next ten years.

Ukrainian Prime Minister Mykola Azarov said earlier in the week that Ukraine is seeking to revamp the current gas contract it has with Russia as it is "enslaving" and could possibly lead the country into an economic collapse.


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