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Ukrainian leader, fresh from EU talks, to meet Russia's Putin

KIEV (Reuters) - Ukraine’s president will discuss Russian gas imports at a reinstated meeting with Vladimir Putin next week, as Kiev seeks to win lower energy prices from its giant neighbor without losing a lucrative trade deal with the European Union.

Ukrainian President Viktor Yanukovich (L) speaks next to European Council President Herman Van Rompuy during an EU-Ukraine summit in Brussels February 25, 2013. REUTERS/Francois Lenoir

Yanukovich’s administration said he would make a working visit to Russia for talks with Putin on Monday. A Kremlin source said the two men were expected to meet at a government residence at Zavidovo, north of Moscow.

Ukrainian President Viktor Yanukovich, who has so far unsuccessfully sought to persuade Moscow to bring down the high price it pays for strategic supplies of Russian gas, had been due to discuss gas prices with Putin last December.

But the Ukrainian leader pulled out at the last minute, saying more time was required to draft official documents.

Speaking in Moscow on Friday, a Kremlin spokesman said differences which had caused December’s meeting to be canceled had not yet been ironed out.

“At the moment, differences have not been settled. Work is still going on. There are no plans for signing any documents from the meeting,” Putin’s press secretary, Dmitry Peskov, was quoted by Interfax as saying.

The timing of Yanukovich’s visit to Russia is significant - coming on the heels of Monday’s trip to Brussels where he had talks with EU officials about prospects for signing an ambitious free trade and political association agreement.

Political commentators say Russia is trying to use the gas negotiations to put pressure on Ukraine to join the Customs Union it leads with two other former Soviet republics or allow it to take over the Ukrainian gas pipeline network.

EU leaders have warned Yanukovich and the Ukrainian government that membership of the Russian-led Customs Union is not compatible with a free trade agreement with the EU bloc.

Ukraine, a transit state for nearly 70 percent of all Russian gas shipped to the European Union, and itself heavily reliant on Russian supplies, has repeatedly clashed with Moscow over its gas bills.

Though the Kiev government has balked at Moscow’s demands for concessions, it is struggling to keep paying its fuel bill to Russia under the current terms.

Kiev says the price of around $430 per 1,000 cubic meters it is paying, under a 10-year contract brokered in 2009 by the former government of Yulia Tymoshenko, is draining its budget.

Tymoshenko herself is at present in jail on charges of abuse of office stemming from that agreement.

Writing By Richard Balmforth; Editing by Jon Boyle