Russia, Ukraine in EU-brokered talks on gas

Published January 08, 2015

Russia and Ukraine are to hold European Union-brokered talks on their long-running gas dispute Friday as pressure mounts for a solution to head off a winter supply crisis in Ukraine and beyond.

The meeting in Berlin between the Russian and Ukrainian energy ministers, hosted by EU energy commissioner Guenther Oettinger, comes more than three months after Moscow cut off gas supplies to Kiev.

The dispute, part of a wider conflict over Ukraine's relations with Russia and the West, involves the price of Russian gas supplies and Kiev's historic gas debts.

A sense of urgency is beginning to mount. Much of the Russian gas supplied to EU countries passes through pipelines that cross Ukraine.

"European and Ukrainian energy and gas supplies are very closely connected with each other," German Chancellor Angela Merkel said this week. "Winter is nearing, so time is pressing."

Russia is still allowing gas to transit through Ukraine's pipeline network to customers in the rest of Europe. Poland and some other European countries have sold some of their gas to Ukraine via so-called "reverse flow" shipments, which Moscow dislikes.

Russia shut off supplies to Ukraine after the two sides failed to agree on a formula for paying what Russian gas giant Gazprom said was $4.458 billion in gas debts, and Moscow demanded upfront payments for future supplies. The two sides have also failed to bridge differences over the future gas price for Ukraine, with Kiev insisting on a lower price than Moscow offered.

Previous three-way talks to avert the gas cutoff have failed.

Oettinger told reporters in Brussels Thursday that the goal is "to get a real constructive and coherent answer" to the dispute. "I do always expect good results, so for tomorrow as well," he said.

EU member states got 24 percent of their gas in 2012 from Russia, according to industry association Eurogas, and about half of that goes through the pipelines across Ukraine. In 2013, Ukraine imported nearly 26 billion cubic meters of gas from Russia, just over half its annual consumption.

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