Ukraine's Yanukovich flirts with Russia as election looms

SOCHI, Russia (Reuters) - Ukraine's President Viktor Yanukovich hinted on Saturday he may soften his stance against Russia over gas prices and membership of Moscow-backed regional groups, seeking support from the Soviet-era ruler before an October parliamentary election.

Ukraine is heavily dependent on Russian gas while about 70 percent of Russia's gas exports to Europe go via Ukraine.

Kiev has tried for years to renegotiate a deal struck in January 2009 after Ukraine's squabbling with Moscow left several European countries without gas for almost three weeks when Russia halted exports via Ukraine.

Yanukovich, whose party faces an election in late October, met Vladimir Putin in the Russian president's Black Sea residence of Bocharov Ruchei.

This was second such meeting in just over six weeks, and despite the fact that the encounter again failed to produce any solid results, the Ukrainian leader said his country may change its stance in gas talks. He gave no further details.

"The issue (of gas supplies from Russia) will never be excluded from our relations and will always remain sensitive," he said. "We would like to slightly alter our positions in our relations with Russia."

After failing to get a discount from Moscow in prolonged negotiations throughout 2011, Ukraine, which pays more than $400 per 1,000 cubic meters of Russian gas - on a par with Europe - tried to cut the volume of its gas imports, set at maximum of around 50 billion cubic meters (bcm) a year.

The Kremlin has hinted that it may sweeten the gas deal if Ukraine joins a Putin-brokered alliance, including fellow former Soviet states of Russia, Belarus and Kazakhstan.

Kiev has resisted the idea of jointly building Putin's vision of a Eurasian Union, but Yanukovich told the Russian president that Ukraine is willing to participate in another Moscow-backed entity, the Shanghai Cooperation Organisation.

"We would like to become observers in this organisation so that we would be able to take part in integration processes on this territory," Yanukovich said.

Yanukovich's Party of the Regions hopes to get a renewed majority at October 28 elections despite signs of flagging support in parts of the country's industrialized east and south, with high gas prices paid by consumers traditionally seen as a major shortcoming of the Ukrainian leadership.

Supporting Putin, who is popular among the Russian-speaking population of Ukraine, was crucial for Yanukovich in his victory in 2010 presidential election, when he trounced the leader of the 2004-2005 Orange Revolution Yulia Tymoshenko.

Tymoshenko was jailed last year for abuse of office relating to the January 2009 gas agreement.

(Editing by Louise Ireland)

Source: http://news.yahoo.com/ukraines-yanukovich-flirts-russia-election-looms-152154453.html

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