Exactly. Putin is saying he is going to keep Crimea and use threat of invasiosn so Ukraine will institute a new Federal constitution. Which means he will let the EU have Western Ukraine and Kiev and he will have allied federated states in Eastern and Southern Ukraine under the new constitution.
Federalization means that the Ukraine is dismembered and each political entity (Oblast) votes on what to do. Like Mexico telling the USA to have a vote in 50 states because CA has a large population of Mexican-Americans.