|
 Citing unpaid bills worth more than $5 billion, Russia cut off gas
flows to Kiev in mid-June, adding to tensions sparked by Russia's
annexation of Ukraine's Crimea region.
After months of stalemate, pressure has mounted to reach a deal to
allow gas deliveries for heating as winter approaches.
Differences remain but Russian Energy Minister Alexander Novak said
ahead of the talks that he hoped to finalize a deal on Tuesday.
The three sides arrived in Brussels for negotiations provisionally
set to end by 1200 GMT (8.00 a.m. EDT) although officials warned
they could run over.
The focus is on price, the number of payments Kiev should make, and
the volume of gas Ukraine would get from Russia over the winter
period, Commission spokeswoman Marlene Holzner said earlier.
Despite cutting off gas for Kiev, Russian exporter Gazprom has not
cut supplies flowing through the country en route to EU member
states.
 The European Union relies on Russia for around one third of its gas,
roughly half of which flows via Ukraine.
EU governments are concerned, however, and leaders will discuss ways
to curb dependence on Russian energy at summit talks in Brussels on
Thursday and Friday.
Two previous price rows between Russia and Ukraine in 2006 and 2009
did impact supply to EU nations.
The gas row this time is more complicated due to the deterioration
in relations between Moscow and Kiev, although EU leaders also say
solving it could help to defuse wider tensions.
After the ouster of pro-Moscow Ukrainian President Viktor Yanukovich
in February, Russia annexed Ukraine's Crimea region and has been
accused of backing pro-Russian separatists in the east of the
country where more than 3,700 people have died.
REASONS TO GET A DEAL
U.S. and EU economic sanctions on Russia plus a fall in the price of
oil have increased incentives for Moscow to resolve the dispute.
State-controlled Gazprom earns around $6 billion a month selling gas
to the EU.
"Without a doubt, sanction regimes put on Russia by the U.S. and the
EU have already eaten into the country's economic health,"
Vienna-based consultancy JBC energy wrote in a note.
"And also Ukraine, presumably unwilling to again jeopardize gas
supplies during winter while military operations are not going as
planned either, will at least temporarily be interested in easing
the pressure exerted on it by Russia."
[to top of second column] |
The EU's Oettinger has been brokering talks between the two sides
since May after Russian President Vladimir Putin called on the EU to
intervene. A summit held in Milan on Friday produced hopes for a
breakthrough after Ukraine President Petro Poroshenko met Putin and
said they had reached a preliminary agreement on a gas price until
March 31.
The interim price would be $385 per 1,000 cubic meters, higher than
the average of some $350 that Gazprom charges EU companies but $100
less than Russia had demanded.
Putin, meanwhile, said Ukraine's debt for Russian gas supplies stood
at $4.5 billion, considerably less than the $5.3 billion previously
demanded by Gazprom.
Kiev had balked at the previous figure, arguing that the price used
to calculate the arrears should be $268.50, which is what it was
paying in the first quarter of this year.
Russia's energy ministry said on Friday that Ukraine had agreed to
make a first debt payment of $1.45 billion by the end of this month
and another $1.65 billion by the end of the year.
Ukraine is likely to buy up to 5 billion cubic meters of Russian gas
this winter, but state coffers have been drained by the conflict in
the east, despite a shaky ceasefire.
Kiev faces a $3.5 billion funding shortfall for this year and next
but the International Monetary Fund has said the government should
be able to cover most of it with planned debt issues and an expected
$900 million in further donor support.
(Additional reporting by Vladimir Soldatkin and Ekaterina Golubkova
in Moscow; editing by Jason Neely)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
