UPDATE 3-Russia, Ukraine agree to remove gas middlemen

(Adds Yushchenko comments in paragraph 21)

By Dmitry Zhdannikov and Tanya Mosolova

MOSCOW, March 13 (Reuters) - Russia and Ukraine will remove all middlemen in their gas trade, Russia's gas export monopoly said on Thursday, ending years of opaque schemes which caused tensions between the two neighbours and alarmed investors.

"There is no need for them now after we agreed to supply some volumes to Ukraine's industrial consumers directly and given the upcoming rise in the Central Asian gas price," Gazprom's (GAZP.MM: Quote, Profile, Research) spokesman Sergei Kupriyanov told Reuters.

The move is likely to be hailed by Ukraine's Prime Minister Yulia Tymoshenko, who has demanded Moscow axe all intermediaries saying their role was unclear and led only to gas price increases for Ukraine.

Her tough stance and Ukraine's debt for previous supplies of gas were the main reasons behind a new round of tensions between Moscow and Kiev, which prompted Gazprom to briefly halve supplies to Ukraine earlier this month.

"She can now convincingly argue that she has eliminated the intermediaries from the gas trade," said Geoffrey Smith, analyst from Renaissance Capital.

Russia supplies a quarter of Europe's gas needs and most of that passes through Ukrainian territory.

European governments are wary of a repeat of the disruptions to Russian supplies to the continent in the winter of 2006 which came after a similar row between Gazprom and Kiev.