March 14, 2012 / 3:03 PM / 5 years ago

REFILE-Ukraine to buy gas in Germany if Russia talks fail

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By Olzhas Auyezov

KIEV, March 14 (Reuters) - Ukraine will buy gas in Germany if sole supplier Russia refuses to cut the price in long-running talks, Ukrainian Prime Minister Mykola Azarov said on Wednesday, adding that such purchases would be cheaper.

"He (Azarov) said that if talks with Russia are unsuccessful, Ukraine will buy gas of Russian origin from a German company, which will be cheaper than (buying) directly from Russia," a statement by the Party of the Regions, which Azarov chairs, quoted him as saying.

Ukrainian state energy firm Naftogaz plans to buy gas from Germany's RWE, Azarov said without giving any details.

RWE declined to comment.

Analysts say such supplies are possible but in very small volumes, given that Ukraine's pipeline system is designed to pump gas in the opposite direction and is currently used to tranship Russian gas to Europe.

Ukraine has long sought to review a 2009 gas supply deal with Russia, saying it sets an exorbitant price for the fuel - $416 per thousand cubic metres in the first quarter of this year. But Moscow is reluctant to scrap the deal.

Russia has said it will cut the price of gas for Ukraine only in exchange for a stake in the Ukrainian pipeline network.

The Kiev government, in its turn, says the network should be managed by a consortium that also includes large European energy companies.

Azarov told Reuters this week his government hoped to negotiate a new price for Russian gas by July. (additonal reporting by Christ Steitz, editing by Jane Baird)

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