Russian Prime Minister Vladimir Putin was Thursday to meet his Ukrainian counterpart Yulia Tymoshenko for a rare meeting aimed at preventing a repeat of last winter's gas crisis.
They will meet at the Livadia Palace in the Crimean resort of Yalta, the venue for the 1945 conference where Joseph Stalin, Franklin Roosevelt and Winston Churchill met to redraw the postwar map.
While relations between Russia and pro-Western Ukrainian President Viktor Yushchenko have reached crisis point, Putin and Tymoshenko have re/peatedly boasted of their cordial relationship.
Russia-Ukraine ties have been fraught since a dispute between the two countries over gas prices led to the cut-off of Russian gas to much of Europe for two weeks amid freezing temperatures last January.
In a sign of the high-stakes talks, Putin is bringing three of his most influential officials to Ukraine--First Deputy Igor Shuvalov, energy czar Igor Sechin and Finance Minister Alexei Kudrin, Putin's foreign policy aide Yury Ushakov said. Alexei Miller, chief executive of Russian gas giant OAO Gazprom (GAZP.RS), and Energy Minister Sergei Shmatko will also be present, Ushakov said.
The meeting Thursday afternoon will also be a chance for Putin and Tymoshenko to flaunt their strong relations ahead of presidential polls in Ukraine in January in which the Ukrainian premier is a frontrunner.
"The situation in the gas sphere will naturally be discussed in a detailed and thorough manner," Ushakov told reporters. He declined to elaborate, only noting Russia was concerned over existing problems in the gas trade with Ukraine that lead to a "near dead end" every month.
Europe is worried a renewed price dispute between Russia and Ukraine could lead to a new cut in gas supplies to European customers this winter. Russia has repeatedly warned of Ukraine's financial problems in the past weeks.
Putin and Tymoshenko will most likely discuss the presidential vote, set for Jan. 17, even though the issue wasn't on the official agenda, Ushakov said.
"When the two heads of government meet ahead of the elections, I think this subject cannot be bypassed." He said however the talks shouldn't be seen as Russia lending support to Tymoshenko's candidacy.
Putin has accused Yushchenko of preventing the transfer of funds to pay for Russian gas.
In the polls, Tymoshenko will compete with Yushchenko and more pro-Russian candidate Viktor Yanukovich, whom Russia supported during the 2004 election. Securing a better deal on energy, including the possibility of buying less gas next year, will be a top priority for Tymoshenko, analysts said.
Plunging domestic demand for gas has put Ukraine in a quandary, since its current contract with Gazprom requires it to pay for a fixed amount. Ukraine was set to buy 52 billion cubic meters of Russian gas next year but may need only 27 bcm, an official from its state gas firm Naftogaz said Tuesday.
During talks between Putin and Tymoshenko in September, Russia agreed to allow Ukraine to pay for only as much gas as it needs. That agreement has never been put in writing, exposing Ukraine to the threat of multi-billion-dollar fines.
Tymoshenko reiterated Wednesday that Ukraine will double the price for transit of Russian gas through its territory from next year--a change unlikely to go down well in Moscow.