UPDATE 2-Medvedev: changing Ukraine gas deals "irresponsible"

* Ukraine should stick to 10-year gas contract - Medvedev

* Says Ukraine can pay for Russian gas

* Wants “painless” switch to market prices

* Naftogaz says no threat to gas payments

(Adds Naftogaz comment)

By Denis Dyomkin and Pavel Polityuk

MOSCOW/KIEV, Dec 9 (Reuters) - Russian President Dmitry Medvedev said on Wednesday it would be “irresponsible” to amend gas supply contracts with Ukraine, in a sign Moscow will offer no more concessions to its ex-Soviet neighbour on gas payments.

Medvedev’s comments follow a renewed attack by Ukraine’s top security body on the 10-year supply pact which brought an end to the January “gas war” and restarted Russian gas flows through Ukraine, a route supplying Europe with one-fifth of its gas.

“We have signed a treaty this year for 10 years ... I think that proposals to change them are irresponsible,” Medvedev said during a media forum, adding that Kiev had shown it was capable of paying for Russian gas.

European consumers are anxious to avoid a repeat of the New Year dispute between the ex-Soviet neighbours that left millions without heating and forced gas-starved factories to close.

Medvedev made no reference to any specific moves to alter the contract, but his comments followed renewed criticism of the deal by Ukraine’s Security Council, headed by President Viktor Yushchenko.

The security body said late on Tuesday that Naftogaz, Ukraine’s state energy company, could fall $3.5 billion short of meeting gas payments to Russia next year under the current deal. Naftogaz issued a strongly worded statement to counter these suggestions, saying there was no threat of a repeat gas crisis.

“There are no financial reasons for any failure to make the regular payment for imported gas,” said Naftogaz, which has to date settled all monthly bills on time, most recently the $770 million due for November shipments.

Medvedev welcomed these payments. “Despite talk that something is happening, that the (Ukrainian) president is not working, the Ukrainians are paying every month and this makes me happy,” he told the forum.

“Our EU partners say this isthe result of their work with them. They say the Ukrainians have money.”


Russian authorities have said political infighting between Yushchenko and rivals in a Jan. 17 presidential election, including Prime Minister Yulia Tymoshenko, was the main threat to Ukraine’s ability to pay for its gas on time.

Tymoshenko and her Russian counterpart, Vladimir Putin, brokered a deal last month that led Russian gas export monopoly Gazprom GAZP.MM to allow Ukraine's crisis-hit economy to use 35 percent less gas next year than originally contracted.

The agreement, signed on Nov. 24, also waived fines to which Ukraine was liable on supplies for 2009. [ID:nGEE5AN2Q7]

Yushchenko also showed rare unity with Tymoshenko when assuring the European Union last week that Kiev would secure gas transit. [ID:nGEE5B31GH]

The 10-year contract stipulates that Ukraine will switch to paying market price for Russian gas from Jan. 1, 2010, after enjoying years of cut-price supplies. In 2009, Ukraine has been paying a 20 percent discount to the European price formula.

“I hope Ukraine’s switch to market prices will be painless,” Medvedev said. “I think that, in general, if our Ukrainian partners show responsibility, everything will be alright.” (Writing by Robin Paxton, editing by Anthony Barker)