KIEV, March 22 – A Ukrainian government team will travel to Moscow on Tuesday to seek lower natural gas prices, perhaps in exchange for creating a consortium that would jointly operate Ukrainian gas pipelines.

The project apparently calls for Ukraine, Russia and the European Union each controlling a third in the consortium to operate the pipelines moving 80% of Russia’s Europe-bound gas.

President Viktor Yanukovych met Foreign Minister Kostiantyn Hryshchenko on Monday to issue instructions for the team, according to the presidential press service.

Yanukovych said that a deal with Russia over gas prices will have to be reached before Russian President Dmitry Medvedev visits Kiev on May 17.

Andriy Kliuyev, the first deputy prime minister who supervises the energy complex, said recently Ukraine will seek to encourage Russia to lower the prices by suggesting the consortium that would operate the Ukrainian gas pipelines.

Russia has been long seeking to gain access to the Ukrainian gas transportation network, one of the largest such facilities in the world that provide a bulk of Gazprom’s hard currency revenue.

Meanwhile, the plan is controversial as the gas transportation system is regarded as a strategic asset and a special law prohibits its privatization.

Yulia Tymoshenko, a former prime minister, on Monday issued a statement warning that her political groups would launch massive street protests if the government goes ahead with the consortium project.

“All foreign partners to whom current government officials will be suggesting creating the consortium to operate the gas transportation system must know that this proposal is illegal and contradicts national interests of Ukraine,” Tymoshenko said.

“The current government is not eternal, responsible politicians will return to power and will cancel all anti-state agreements if they will be reached,” Tymoshenko said. “To give the gas transportation system away into the management is the same as to give Ukraine away into the management.”

Ukraine is currently paying $305 per 1,000 cubic meters of Russia gas, and has been seeking to lower the price to $168 per 1,000 cu m, which Russia is charging its ally Belarus.

More realistically, the Ukrainian government team will be seeking to secure the price of up to $210 per 1,000 cubic meters, according to a source in the government.

In this case, the government may postpone a hike in domestic gas prices, one of the key demands from the International Monetary Fund, the source said.

The government plans to reserve about 15 billion hryvnias in subsidies on the gas sector in the draft 2010 budget, the money that will be enough if Russia agrees to lower its gas price, the source said. (tl/ez)