No let-up in Russia gas stand-off with Ukraine

Russia and Ukraine on Friday remained at odds in a gas crisis that has raised concerns over Europe’s dependence on Russian energy, as Moscow warned that Kiev faces drastically higher prices in 2009.

Russian energy giant Gazprom on Thursday cut off gas deliveries to Ukraine in a row over late payment of debts and new prices, sparking worries in Europe over the security of gas pumped from Russia across Ukrainian territory.

Striking a rare tone of hope in a dispute marked by bitter verbal exchanges, Ukrainian President Viktor Yushchenko said late on Thursday the two sides were “near to a compromise”.

But Gazprom’s chief executive, Alexei Miller, then scotched all hopes of a quick deal, saying Ukraine would have to pay $418 per 1 000 cubic metres of Russian gas in 2009, more than double what it paid last year.

Russia had earlier this week offered Ukraine a price of $250, which Kiev turned down. The price of $179,50 that Ukraine paid in 2008 is well under the amount paid by European countries for Russian gas.

“In connection with the rejection by Ukraine of the reduced conditions for the delivery of gas at $250, Gazprom will realise the delivery of gas to Ukraine from January at the European market rate of $418 per 1 000 cubic metres,” Miller said.

Meanwhile, a Ukrainian delegation led by Energy Minister Yuri Prodan was to begin touring European capitals on Friday to discuss gas delivery problems, the Foreign Ministry said.

The delegation will first meet with Prime Minister Mirek Topolanek of the Czech Republic, which took over the rotating European Union presidency on January 1, before heading to other European capitals.

Gazprom spokesperson Sergei Kupriyanov was to give a news conference later on Friday in which he was expected to comment on Russian suspicions that Ukraine could reduce the level of gas in transit to Europe.

There was no word on when negotiations would resume between the two sides after talks collapsed without result on Friday.

Major European consumers of Russian gas, including Germany and Italy, reported no immediate impact on their supplies but the both the European Union and the United States have expressed concern over the dispute.

“We urge Russia and Ukraine to resolve their dispute over the gas debt and the terms of their natural gas supply arrangements in a transparent, commercial manner,” US State Department deputy spokesperson Gordon Duguid said.

Both Gazprom and Ukraine’s state gas firm Naftogaz have vowed they will fulfil their obligations towards European consumers.

With temperatures in Kiev already plunging to minus 10 degrees Celsius, Ukraine has insisted it has enough gas stored in underground reservoirs to see its citizens through the winter.

Gazprom’s move recalled a similar cut-off in January 2006 that affected gas supplies to Europe. Gazprom pumps more than 300-million cubic metres per day of gas across Ukraine destined for clients in Europe.—AFP



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