KIEV, April 10 – Russia agreed to resume economic talks with Ukraine after Prime Minister Yulia Tymoshenko assured her Russian counterpart that Gazprom would be able to invest in modernization of Ukrainian gas pipelines.

Tymoshenko spoke with Vladimir Putin by phone late Thursday, seeking to restart the talks on a number of economic and trade issues, including $5 billion loan to cover massive gas purchases in the summer.

The talks, originally due on April 8, were postponed indefinitely as Moscow had sought to punish Ukraine for alleged intention to cooperate exclusively with the European Union – not with Russia - in the modernization of the pipelines.

“I had a phone conversation with the premier of the Russian Federation last night,” Tymoshenko said Friday. “We agreed that the [talks] will be held in 20th days of April.”

Russia fears that the declaration, signed by Ukraine and by the European Commission in Brussels on March 23, anticipates very close cooperation between the two in the energy sector that may be restricting Russia’s political clout in the region.

The declaration, which calls for the modernization of the Ukrainian pipelines that carry 80% of Russia’s Europe-bound gas, opens an opportunity for the EU to buy gas at the Russian-Ukrainian border.

Coupled with Ukraine’s proposal to expand capacity of the pipelines by 50% to 180 billion cu m/year, the plan would effectively eliminate the need to invest tens of billions of U.S. dollars in construction of two gas pipelines designed to bypass Ukraine.

Both pipelines - Nord Stream and South Stream – have been heavily pushed by Putin and are seen as allowing Russia to reduce dependence on Ukraine for gas shipments, thus making Kiev vulnerable to political pressure from Moscow.

But two weeks after the declaration was signed, Tymoshenko sought to ease the tensions with Moscow by assuring Putin that Russia will be treated as an equal partner in the modernization.

“We discussed all problems that had emerged in the gas sector following the signed declaration,” Tymoshenko said. “We defined that we are partners in the reconstruction and modernization of the Ukrainian gas transportation system.”

“That’s why I believe that the problem has been removed, and we can continue to successfully cooperate,” Tymoshenko said.

Ukraine is going through severe economic crisis caused by collapse of external demand for steel, the country’s main exports, and Tymoshenko has been earlier this year seeking the $5 billion loan from Russia to help cope with the crisis.

The money would apparently be spent by the government to purchase about 20 billion cubic meters of natural gas in the summer to fill underground gas tanks. This gas is supposed to be used in the winter when demand for energy increases in Ukraine and in Europe.

Russian President Dmitry Medvedev said earlier this month that the Russian government will reconsider the plans for the loan among other issues due to the gas declaration signed by Ukraine and the EU last month. (tl/ez)