Ukrainian leaders on Wednesday portrayed a gas deal with Russia as a prime opportunity for the country to start building a market-oriented economy.

"The Ukrainian economy is completely ready for new market conditions," President Viktor Yushchenko said in a statement, adding the agreement spelt the end of barter deals and the beginning of the liberalization of prices according to the European model.

"Ukraine is observing all international transit agreements ... Ukraine is a reliable and stable partner of the European Union and Russia," he added.

Earlier on Wednesday, Russia and Ukraine signed a five-year deal in Moscow, under which Russia's gas giant Gazprom will sell gas to the Rosukrenergo trading company for 230 U.S. dollars per 1,000 cubic meters.

The trading company will mix the Russian gas with gas from Central Asian countries Turkmenistan, Kazakhstan and Uzbekistan and sell the blend to Ukraine for 95 dollars per 1,000 cubic meters.

The new price amounts to a huge rise from the 50 dollars that Ukraine had been paying until now, a remnant of the subsidized Soviet-era pricing system.

Ukrainian Prime Minister Yury Yekhanurov told a news conference that Ukraine would drastically reduce gas consumption to prevent another gas crisis and ensure his country's independence.

He said Ukraine's 48 million people will consume some 48 billion cubic meters of gas in 2006, sharply down from the 76 billion last year.

He also stressed the importance of modernizing industry, especially the steel sector.

"This is the conclusion: true independence for Ukraine is only possible with energy independence," Yekhanurov said.

Source: Xinhua