Ukraine parliament strikes down PM's energy proposals

Ukraine's parliament struck down plans by Prime Minister Arseny Yatseniuk on Thursday to guarantee the government tighter control over the energy sector in the face of dwindling natural gas supplies after Russia cut off exports last month.

The plans would have allowed Kiev to dictate domestic gas flows irrespective of pre-existing contracts, as well as permit consortiums with European and U.S. companies to operate Ukraine's gas distribution system and storage facilities.

One bill which would have allowed the government to control domestic gas flows gained 181 votes, below the 226 votes needed for approval. A second bill allowing foreign consortiums to manage the infrastructure received only 170 votes.

"We believe that the wording proposed by the government assumes the unfounded possibility for micromanaged, unchecked control," said Svoboda fraction leader Oleh Tyahnibok.

The bills can still be revised by the government and resubmitted to parliament for approval at a later date.

Russia, Ukraine's main supplier of strategic supplies of gas as well the main provider of natural gas for Europe via Ukraine, cut off supplies to the ex-Soviet republic on June 16 in a dispute over unpaid bills.

Some deputies voiced fears over possible retaliation from Russia if it were not given the same access to Ukraine's gas infrastructure as would be offered U.S. and European firms.

"We consider it unreasonable to create a gas consortium without the participation of the exporting country (in this case Russia). Otherwise we can have our gas transport system and have nothing to transport," said Party of Regions deputy Oleksandr Dolzhenkov.

Russia had previously offered to buy into Ukraine's gas distribution system in return for cheaper gas.

(Reporting by Natalia Zinets, Writing by Thomas Grove; editing by Keiron Henderson)