Ukraine, Russia see imminent end to latest gas war

Ukraine and Russia stood on the verge today of resolving their latest gas war in time to keep the war-scarred nation and EU clients warm through the winter months.

Ukraine, Russia see imminent end to latest gas war

Kiev: Ukraine and Russia stood on the verge today of resolving their latest gas war in time to keep the war-scarred nation and EU clients warm through the winter months.

Ukrainian President Petro Poroshenko said he and Russian counterpart Vladimir Putin had reached a price deal at high-stakes talks in Milan yesterday that otherwise focused on the six-month pro-Kremlin revolt convulsing the ex-Soviet state's separatist east.

Two meetings mediated by German Chancellor Angela Merkel and French President Francois Hollande -- as well as a brief exchange on their own -- marked the two leaders' most in-depth dialogue since Poroshenko's May election.

The tense day broke up without Putin meeting EU hopes that he would denounce the separatist leadership election that pro-Russian militants intend to stage on November 2, a week after parliamentary polls in Ukraine.

But Poroshenko said the meetings produced the broad outlines of a deal that could see Russia halt the gas supply cutoff it began in June -- its third in less than 10 years.

Kiev had branded the cut a form of "economic aggression" aimed at punishing the new pro-Western leaders for their February ouster of a Kremlin-backed president and a decision to sign a landmark EU trade and political association pact.

Poroshenko told the nation late Saturday that he had made sure in Milan that their homes would stay warm through the bitter winter season -- a crucial promise to make ahead of next Sunday's crunch general election.

"Ukraine will have gas. Ukraine will have heat," Poroshenko said in a pre-recorded television interview.

He said a more detailed protocol agreement due to be completed by Tuesday will see Ukraine meet Russia's demand and pay USD 385 per 1,000 cubic metres of gas for deliveries guaranteed through the end of March.

Poroshenko said he and the two European leaders had pressed Russia to lower that rate to USD 325 per 1,000 cubic metres for summer months when energy demand drops.

"The Russian side insists on USD 385 for the whole year," said Poroshenko.

The chief spokesman for Russia's state-held gas giant Gazprom confirmed that the two sides had found an interim price solution.

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