December 11, 2013 / 11:36 PM / 6 years ago

Russia ties Ukraine gas price relief to better terms for Black Sea fleet

WASHINGTON, Dec 11 (Reuters) - Moscow might be willing to give Ukraine relief on the price of natural gas it imports from Russia if Kiev granted better terms for the Russian naval fleet in Ukraine’s Crimea, a senior Russian official said on Wednesday.

The official said it was difficult to envision granting Kiev’s wish for a lowering of gas prices without Ukraine joining a regional customs union led by Russia.

But he said it might be possible “if they provide something which is real, about the Crimea and our navy there,” the official told a group of reporters.

Ukraine is teetering on the brink of bankruptcy and any easing of the price it pays for the Russian gas its export-dependent economy relies on could be a big help. The nation’s reliance on gas from Russia gives Moscow great leverage as it vies for influence over the former Soviet Republic in competition with the European Union.

Ukrainian President Viktor Yanukovich last month walked away from a free trade deal with the EU in favor of maintaining close ties with Moscow. The move sparked a political crisis in Ukraine, with protesters who want to see more integration with Europe pushing for Yanukovich’s resignation.

Protesters stood their ground on Wednesday at the Kiev city hall after an overnight sweep by riot police.

The official noted that Ukraine agreed in 2010 to extend the period of time in which Russia’s Black Sea fleet could stay in Sevastopol on Ukraine’s Crimean peninsula in return for a lowering of gas prices.

“Maybe if they suggest better terms for our fleet, why not,” he said of the possibility of a fresh deal.

He also said Moscow would be willing to extend loans to Ukraine if they were secured by manufacturing facilities that are important to Russia’s defense.

“If they are ready to sell it and maybe to use it as the security for the loan, we will take it. And we will provide the loan then,” he said. (Reporting by Tim Ahmann; Editing by Philip Barbara)

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