Ukraine balks at EU plan to avert Russian gas cut

Ukraine expressed displeasure on Tuesday with the terms of an EU-brokered compromise with Russia that could save Europe from seeing a part of its gas supplies cut as early as next week.

AFP| Updated: May 27, 2014, 22:05 PM IST

Kiev: Ukraine expressed displeasure on Tuesday with the terms of an EU-brokered compromise with Russia that could save Europe from seeing a part of its gas supplies cut as early as next week.

"What we are hearing now is you pay and then we talk," Ukrainian Finance Minister Oleksandr Shlapak said a day after Europe`s energy commissioner reported that there was a "good chance" a compromise could be reached within days.

"This does not suit us," Shlapak said.
The two neighbours launched their third gas war in less than a decade after the ouster of a Kremlin-backed president in February and Ukraine`s decision to seek closer economic ties with EU states.

Russia retaliated by hiking Ukraine`s gas price by 81 per cent to USD 485.50 per 1,000 cubic metres - the highest of any of its European clients - and demanding a payment by next yesterday of USD 5.17 billion for debts and June deliveries.

Ukraine refused to pay anything and branded the price increase a form of "economic aggression" launched by Russia to regain control over its western neighbour.
Europe imports 15 per cent of its gas through Ukraine and has been keen to help find a compromise that could avert a repeat of 2006 and 2009 disruptions that damaged Russia`s reputation as a reliable supplier and prompted Brussels to seek ways to diversify supplies.

European Energy Commissioner Guenther Oettinger on Monday reported "relatively good progress" at talks in Berlin involving Russian Energy Minister Alexander Novak and his Ukrainian counterpart Yuriy Prodan.

Oettinger said a deal under consideration would see Ukraine pay Russia`s state energy giant Gazprom USD 2 billion by Thursday out of money it received from the International Monetary Fund and other world lenders in the past few weeks.
Russia would then be ready to renegotiate the price of future deliveries.

A USD 500 million payment from Ukraine`s Naftogaz state energy company to Gazprom would follow on June 7 to cover a part of the bill for May.

But Naftogaz said in a statement issued late Monday that the Berlin meeting "unfortunately produced no real progress".