Ukraine wants govt-level gas agreement with Russia

KIEV, Feb 15 (Reuters) - The governments of Ukraine and Russia could sign an energy agreement to avoid the kind of gas rows that have alarmed Europe over the past two years, a senior Ukrainian official said on Friday.

Pricing and debt disputes between the two former Soviet republics have frequently set Europe's teeth on edge since a stand-off in 2006 led to Russia briefly cutting supplies to Ukraine, which transits a large amount of gas for European use.

Europe gets a quarter of its gas from Russia -- most through Ukraine. The last such row was resolved on Tuesday, just before a deadline by Russian giant Gazprom's (GAZP.MM: Quote, Profile, Research) to reduce supplies over payment arrears by Ukraine's Naftogaz of more than a billion dollars.

Prime Minister Yulia Tymoshenko, a fierce critic of the gas intermediaries, is due to visit Moscow next week.

"We can't rule out that when this meeting takes place, signature of an inter-government agreement will be on the agenda," First Deputy Prime Minister Oleksander Turchynov told journalists.

"This is the very sort of document that will guarantee good relations between our countries in terms of energy, free from unforeseen problems and tensions."

Under this week's deal, the two sides agreed on debt repayment, settled gas prices for 2008 and said intermediaries in trade, created after the 2006 row and frequently criticised by Ukraine, would eventually be eliminated.

Russia has refused to sign formal government-level gas agreements since 2005. Gas import price deals are signed between companies or intermediaries.

Gazprom and Naftogaz agreed they would create a 50-50 joint venture to replace the intermediaries. Ukraine says the go-betweens use corrupt practices, leading to higher prices and hurting Naftogaz's financial situation.