Ukraine-Russia Gas Deal Could Be Overturned

It provided for Ukraine to pay market prices with a 20 percent discount for 2009 - $360 in the first quarter against $179.50 last year.

A top aide to Ukrainian President Viktor Yushchenko said on Monday that the deal struck last week to restore Russian gas flows to Europe could be declared invalid if shown to have been concluded under pressure.

The deal between the two ex-Soviet state's gas companies - Ukraine's Naftogaz and Russia's Gazprom - was clinched last week after two long negotiating sessions led by Prime Minister Yulia Tymoshenko and her Russian opposite number, Vladimir Putin.

It provided for Ukraine to pay market prices with a 20 percent discount for 2009 - $360 in the first quarter against $179.50 last year - and eliminated intermediaries in trading as long demanded by the Ukrainian prime minister.

Bohdan Sokolovsky, the president's energy aide, said the outcome differed greatly from Yushchenko's proposals and the deal's provisions were "done in haste with no analysis of the consequences".

In a statement on the presidential Website, he said: "The issue of using pressure must be investigated. The gas agreement between Naftogaz and Gazprom could be declared invalid if it were concluded under pressure."

Yushchenko and Tymoshenko, rivals despite their alliance during the 2004 "Orange Revolution" that brought pro-Western leaders to power, have adopted widely divergent positions on the agreement that ended a three-week cutoff of supplies.

Tymoshenko praised the deal, saying it offered Ukraine the best possible conditions, while the president said the price rise amounted to a "defeat".

The president's top economic aide last week called for talks by the summer to improve the deal's terms. Gazprom chief Alexei Miller rejected any notion of renegotiating the deal.

The president's Website also said Naftogaz chief Oleh Dubyna had been taken to hospital with heart trouble in the days following the signing of the agreement and was likely to undergo treatment for the next two to three weeks.

Sokolovsky said an initial analysis of the contract gave rise to the notion that "pressure had been applied to Dubyna on the night the contract was signed...and this could have had a negative impact on his health".