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Russia rejects Ukraine gas deal of initial $1B payment, deadline passes

Ukraine faced a possible cutoff of gas supplies from Russia as a payment deadline passed and negotiators failed to reach a deal with Russia on gas prices and unpaid bills.

Russian wanted payment of $1.95 billion for past due bills by 9 a.m. Kiev time Monday. As the deadline passed Gazprom issued a statement that it would start demanding payment in advance for gas. The statement did not address whether supplies to the pipelines into Ukraine were immediately being reduced.

The European Commission said in a statement Monday that Ukraine was ready to accept a compromise in talks in Kiev of paying $1 billion now and more later, but Russia was not.

European Union energy official Guenther Oettinger said he was "not pessimistic" that agreement could eventually be reached.