UPDATE 1-Ukraine govt suggests Russia gas debt payment terms

(Releads with deputy PM)

KIEV, Feb 10 (Reuters) - Ukraine is willing to settle its gas debts owed to Gazprom (GAZP.MM: Quote, Profile, Research) on the proviso that it can have a direct import agreement with the Russian gas monopoly, First Deputy Prime Minister Oleksandr Turchynov said on Sunday.

Gazprom has threatened to cut some supplies to Ukraine if the state energy firm Naftogaz does not settle a debt of $1.5 billion by Monday.

Ukraine's new government under Yulia Tymoshenko wants to get rid of supply intermediaries, especially RosUkrEnergo, which is partly owned by Gazprom, as it says their existence raises gas import prices and their structures are opaque and vulnerable to corruption.

"The first deputy prime minister confirms that Naftogaz indeed has debts," said a statement on the government's Web site.

"Naftogaz is ready to commit to full repayment of its debt in exchange for an agreement to sign a direct contract and relevant documents with Russia's Gazprom," it said.

Both Russia and Ukraine have assured Europe -- which receives a quarter of its gas from Russia, most of it via Ukraine -- that the row would not disrupt westward gas flows.

A disagreement over the price of Russian gas imports led to a brief supply cut at the start of 2006, which affected some European countries, but a similar row over debts last October was resolved without affecting supplies.

The latest dispute burst open days before President Viktor Yushchenko's visit to Moscow on Tuesday and weeks before Prime Minister Yulia Tymoshenko was due in Russia. Both are expected to talk about gas agreements.