UPDATE 1-Russia plans to update Black Sea Fleet-Interfax

(Recasts, adds details, context)

MOSCOW, Oct 25 (BestGrowthStock) – Russia plans to upgrade its Black
Sea Fleet with 18 new vessels over the next decade after a deal
with Ukraine to extend the lease on the fleet’s base, a navy
source was quoted by Interfax as saying on Monday.

Ukraine agreed in April to extend the Russian fleet’s
Sevastopol base lease until 2042 in return for a 30 percent cut
in gas prices, a step that underlined Kiev’s shift back towards
Moscow after the election of President Viktor Yanukovich.

The fleet has fallen into disrepair and many of the vessels
are not seaworthy, but Russia plans to modernise it and add at
least six frigates and six diesel-powered submarines, Interfax
cited a source in Russia’s naval command as saying.

“In accordance with the State Armament Programme from 2011
to 2020, the Black Sea Fleet will receive 18 new vessels,” the
source was quoted as saying.

The source said the fleet would also get upgraded Sukhoi-24M
bombers to replace older versions now in use. A navy spokesman
declined to comment on the news agency report.

The base deal marked a turning point in relations with
Moscow as Yanukovich, elected in February, steered Ukraine
closer to its former Soviet master and ditched Kiev’s pursuit of
NATO membership.

Such a major upgrade of the Russian fleet would require
consent from Ukraine, which is trying to renegotiate a 10-year
gas deal agreed in 2009 after Russia cut supplies to its
neighbour in a pricing dispute. [ID:nLDE6820VF]

Russian gas monopoly Gazprom (GAZP.MM: ) has said it could cut
gas prices if Ukraine agreed to merge its state gas company,
Naftogaz, with Gazprom.

The issue of gas prices will be raised when Prime Minister
Vladimir Putin visits Kiev on Oct. 27, Ukrainian officials say.
[ID:nLDE69K1OQ]
(Reporting by Guy Faulconbridge, editing by Paul Taylor)

UPDATE 1-Russia plans to update Black Sea Fleet-Interfax