KIEV, June 30 – Russia and Ukraine will seek to sign a comprehensive natural gas agreement before Sept. 15 in an attempt to avert aggravation over gas prices and transportation costs in December, officials said.

Prime Minister Yulia Tymoshenko, who met her Russian counterpart Vladimir Putin in Moscow, said Ukraine had insisted the agreement to cover at least four years during which gas prices would reach world market level.

“We have agreed with Vladimir Vladimirovich [Putin] that by Sept. 15, after talks with Central Asian [gas producers], we will be able to sign the strategic agreement,” Tymoshenko said in an interview with Studio 1+1 television Sunday.

The agreement “will be not for a year, but for long-term perspective,” Tymoshenko said.

The new deadline for the agreement is almost two months later than what has been earlier suggested by President Viktor Yushchenko.

The deadline already poses a challenge for the government, which needs to know next year’s gas prices to be able to forecast subsidies in the 2009 budget that must be submitted to Parliament before Sept. 15.

Meanwhile, the meeting between Tymoshenko and Putin came as both countries have been exchanging threats over gas prices and possible retaliation with a steep hike in gas transportation costs.

Gazprom, Russia’s state-controlled natural gas giant, warned that it may be forced to charge Ukraine more than $400 per 1,000 cubic meters of gas in 2009, up from $179.5/1,000 cu m in 2008.

Energy and Fuel Minister Yuriy Prodan, who joined Tymoshenko on the trip to Moscow, said Ukraine would retaliate with the respective steep hike in the cost of shipment of natural gas that it charges Gazprom for exports to the European Union.

“Such gas price cannot satisfy Ukraine,” Prodan said. “We will be negotiating a gradual change of the gas price,” he said, adding that Ukraine will link the gas prices hike with the hike in gas transportation tariffs.

Russia moves up to 80% of its Europe-bound gas exports via Ukrainian gas pipelines, which makes Ukraine’s negotiating position strong, analysts said.

Tymoshenko and Putin had a lengthy one-on-one meeting, but no details of the meeting have been released.

“The hike [to $400/1,000 cu m] is absolutely impossible for the economy of Ukraine,” Tymoshenko said. “I think the prices will be increased to the European level within the next 3-4 years.”

Putin said it was too early to say what prices would Gazprom charge Ukraine in 2009, but said the talks over the next few months will focus both, gas prices and transportation costs.

“Both governments will be working to make sure that prices and [transportation] tariffs are acceptable for both countries,” Putin said. (tl/ez)