KIEV, Oct. 27 – The deal over lower natural gas prices that Ukraine is negotiating with Russia does not call for Kiev joining a Moscow-led Customs Union, Prime Minister Mykola Azarov said Thursday.

However, Azarov told Russian radio Ekho Moskvy that the deal will most likely contain a broad package of other undisclosed agreements, refusing to elaborate.

Russia has earlier said that joining the Customs Union, a move that would stop Ukraine’s integration with the European Union, is one of two potential ways of lowering gas prices for Ukraine.

The other would be acquisition of Ukraine’s natural gas transportation system.

Both Ukraine and Russia have reported progress in gas price talks over the past month, after an 18-month stalemate. But no details of the deal have been so far announced, triggering speculations it may contain political concessions by Kiev.

Many figures in Ukraine feared the government could go ahead with signing the Customs Union after recently unexpectedly signing a free trade agreement with Russia and other CIS countries.

Azarov, who said Tuesday the deal with Russia will be reached within a month – not within days as had been earlier expected - said it will contain a broad package of agreements.

“This is a big package that will define the entire spectrum of our relations,” Azarov told Ekho Moskvy. “I wouldn’t want to provide details of this compromise.”

For Ukraine it is crucial to have the agreement with Russia on lowering gas prices in order to be able to qualify for resumption of $15.2 billion loan from the International Monetary Fund.

The IMF has demanded the Ukrainian government to dramatically increase gas prices for households, a measure that would be highly unpopular ahead of the October 2012 general elections.

The government has focused on trying to negotiate lower gas prices in talks with Russia in order to keep the gas household prices unchanged.

The price of gas that Ukraine pays Russia’s Gazprom increased to about $400.5 per 1,000 cu m in the Q4, compared with $355/1,000 cu m in Q3, $297/1,000 cu m in Q2 and $263/1,000 cu m in Q1.

Azarov has repeatedly said a fair price for Ukraine - which is situated closer to the Russian border and buys more gas than any other European country – must be just above $200/1,000 cu m.

Ukraine and Russia first reported breakthrough in the gas talks after a meeting between President Viktor Yanukovych and Russian President Dmitry Medvedev in Zavidovo near Moscow on September 24.

Yanukovych was supposed to suggest creating a trilateral joint venture to operate Ukraine’s massive natural gas pipeline system. The JV would include entities from Russia, Ukraine and the European Union, according to a person at the Yanukovych administration familiar with the situation.

But Russia has been seeking to create a bilateral joint venture, involving Ukraine and Russia, according to a source at Russian gas company Gazprom.

Yanukovych and Medvedev again met on October 18 in Donetsk, Ukraine, after which Yanukovych had said the agreement may be announced “very soon.” (sb/ez)