In the case of a merger, "the gas could be delivered to the population of Ukraine … at a price at which gas is delivered to the Russian households," Gazprom Chief Executive Officer Alexei Miller Friday told state-owned television Rossia 24 TV.

Private Russian customers pay around $60 for 1,000 cubic meters of gas. The most recent export price to Ukraine was around $230 per 1,000 cubic meters -- so the price reduction would be substantial.

Ukraine has sent a top delegation led by Energy Minister Yuri Boiko to Moscow Friday that will try to renegotiate the gas price without having to give up control of Naftogaz.

The utility owns the Ukrainian distribution network, a key energy security asset through which nearly 80 percent of Russian gas exports to Europe are sent, satisfying one-fifth of the continent's demand.

Ukraine's President Viktor Yanukovych said in May Gazprom may get some control over Naftogaz if it invests in the modernization of the Ukrainian grid. "But full Russian control? No, that's empty words," he said.

In the past years, gas conflicts between Russia and Ukraine temporarily halted supplies to Europe, damaging Kiev's reputation as a reliable transit country.

Moscow has since launched two pipelines -- Nord Stream and South Stream -- that bypass Ukraine, which is concerned that it might lose its position as the dominant energy transit country to Europe.

At the same time, it's vital for fiscally troubled Ukraine to pay less for Russian gas, with the current price being "extremely disadvantageous," and "enslaving" for Ukraine, Prime Minister Mykola Azarov said Wednesday in Parliament. If the current contract isn't renegotiated, Ukraine faces an "economic catastrophe," he added.

Yanukovych and Russian President Dmitry Medvedev in April agreed to a 30 percent discount of the gas price, which then was $330 per 1,000 cubic meters over the next 10 years. The move was a sign of improving ties between both governments after Yanukovych, a pro-Russian figure, had taken over as president of Ukraine early this year.

Yanukovych hopes that the improving relations help bring about new deals to modernize the Ukrainian gas transport system. Ukraine doesn't have the money to do it alone, as its economy is in shambles and the national budget overstretched.

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