Kiev (Platts)--27Apr2010/605 am EDT/1005 GMT

The Ukrainian parliament on Tuesday ratified a natural gas agreement with Russia that provides a 30% price discount in exchange for extending stationing of Russian navy in Ukraine.

The agreement, signed by Ukrainian President Viktor Yanukovych and his Russian counterpart Dmitry Medvedev last Wednesday, allows Russia to extend by 25 years the stationing of its Black Sea Fleet in Sevastopol beyond 2017 when the original agreement was supposed to expire.

In exchange, Russia has agreed to provide a 30% discount on gas prices during the next 10 years. The discount, however, should not exceed $100/1,000 cu m, according to the deal.

Russian Prime Minister Vladimir Putin on Monday said Ukraine will benefit from ratification of the agreement. Putin traveled to Kiev late Monday and met with Prime Minister Mykola Azarov and President Yanukovych a day before the agreement's scheduled ratification.

Putin said the agreement will cost Russia an extra $3 billion in 2010, and $4 billion annually starting from 2011 during the next nine years.

"This is serious money even for Russia's budget," Putin said late Monday after the meeting with Yanukovych in comments broadcast by state television. "This will increase the budget deficit in Russia, but will reduce budget deficit in Ukraine."

Ukraine was importing gas at $330/1,000 cu m in the second quarter, but the price will now drop to $230/1,000 cu m provided that the agreement is ratified in Ukrainian and Russian parliaments.

--Alexander Bor, newsdesk@platts.com