Russia discusses resumption of Ukraine gas deliveries with EU

Gazprom in July had halted all natural gas supplies to Ukraine after breakdown of talks between Moscow and Kiev over pricing

Russia and the European Union have discussed ways of ending Russia's gas dispute with Ukraine to allow for the resumption of gas supplies to Russia's war-torn ex-Soviet neighbour.

Russian gas giant Gazprom in July halted all natural gas supplies to Ukraine after the breakdown of talks between Moscow and Kiev over pricing.

Moscow claimed that Brussels would provide money for Ukraine's gas purchases.

"It seems to us that we were able to reach an agreement on the so-called winter package," Russian energy minister Alexander Novak was quoted a saying by Russian agencies after the meeting in Vienna yesterday with the European Commission's vice-president for energy Maros Sefcovic.

Novak said that the fate of the agreement now depended on Ukraine. "If they agree it, we could meet next week," he said of the next round of talks, which would involve Ukraine and after which the gas could flow.

The European Commission said yesterday's meeting "created a solid basis for convening a trilateral meeting with Russia and Ukraine and to finalise a new package in the near future."

Ukraine transports 15% of gas consumed by Europe and its own reserves are running low more than two months after Gazprom turned off the tap.

Novak said that Moscow, which has refused to fix gas prices for more than a quarter, was ready for a "price discount for the winter period to set the price at the level of neighbouring countries like Poland."

The Russian side also claimed that the EU was offering to provide $500 million to Ukraine specifically for Russian gas purchases.

"$500 million will go especially for buying Gazprom's gas," good for two billion cubic metres, said Gazprom chief Alexei Miller.

Miller went on to warn that the upcoming winter could be unusually cold, claiming that "abnormally cold winters happen once in ten years and we all remember the cold winter of 2005-06."

The chief of Ukraine's gas operator Naftogaz Andriy Kobolev confirmed to journalists yesterday that Kiev plans to "get money mostly from the Europeans in form of loans as well as other sources."

End-of-year haggling over energy prices had been a familiar problem between Russia and Ukraine but ties collapsed altogether after a popular uprising in Kiev ousted Kremlin-backed leader Viktor Yanukovych last year, after which Moscow hiked the price.