Ukraine sends delegation to Moscow for talks on gas

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SummaryUkraine on Wednesday sent a top-level delegation to Moscow for talks on gas and other economic issues...

Ukraine on Wednesday sent a top-level delegation to Moscow for talks on gas and other economic issues - the first such since the Kiev government announced a U-turn in trade policy away from the European Union back towards Russia.

Prime Minister Mykola Azarov told his cabinet that the visit would continue a dialogue with Russia on trade and economic relations that are "very critical for maintaining and developing Ukrainian industry and economy."

Ukrainian officials confirmed the delegation would be headed by a deputy prime minister, Yuri Boiko, whose portfolio covers energy. Russian agencies reported that Boiko was meeting Russian Prime Minister Dmitry Medvedev.

Ukraine, whose decision to spurn a trade deal with the European Union and bolster relations with Moscow has sparked huge street protests in Kiev, has been seeking lower prices on deliveries of Russian gas.

The Boiko visit was clearly part of the government's plans to sketch out what the Ukrainians hope will be a 'roadmap' for future economic ties with their old Soviet master.

In a move that will improve the atmosphere around Boiko's visit, Ukraine's state-run energy firm Naftogaz said on Tuesday that it had agreed with Russian giant Gazprom to defer gas payments for the final three months of 2013 to the spring.

Ukraine faces huge challenges to finance a current account deficit of 7 percent of gross domestic product, and cheaper Russian gas would buy time for Kiev to find ways to meet outside funding needs estimated at $17 billion next year.

Naftogaz will pay $765 million due to Gazprom for deliveries in August, Naftogaz head Yevhen Bakulin told reporters on Tuesday.

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