EU energy chief: Progress in Ukraine gas row, more talks this month

ATHENS Thu May 15, 2014 12:39pm EDT

Related Topics

ATHENS (Reuters) - Europe's energy commissioner said on Thursday he saw progress in resolving the row over gas prices between Kiev and Moscow and expected one, perhaps two more rounds of ministerial talks on the issue before the end of May.

In his latest letter to EU leaders, made public on Thursday, Russian President Vladimir Putin urged them to do more to help Ukraine through its economic crisis and to resolve the standoff over gas, repeating a threat to cut exports if Kiev fails to pay in advance for June deliveries.

"There is no reason to be nervous or aggressive. There is some progress," Commissioner Guenther Oettinger told Reuters on the sidelines of a meeting of EU energy ministers in Athens.

Putin first wrote to EU leaders last month, suggesting three-way talks between Russia, Ukraine and the European Union.

European Commission President Jose Manuel Barroso wrote back accepting the offer, and a first round of talks took place early this month.

On Monday, Oettinger is meeting Russia's energy minister and the head of Gazprom in Berlin to set a date for further talks.

"Now we are preparing a second and, if necessary, a third ministerial (meeting) before the end of May, between May 26 and May 31," Oettinger said.

The main sticking point is price, with Ukraine insisting on a price of $268.50 per 1,000 cubic meters of gas and Russia standing by its demand for $485.

As proof that talks so far had resulted in progress, Oettinger cited the fact that the second letter from Putin mentioned only a gas debt of $3.5 billion owed by Ukraine.

The earlier letter a month ago had referred to "a whole string of unprecedented privileges and discounts on the price of natural gas". It said that during the past four years, Russia had been subsidizing Ukraine's economy by offering slashed gas prices worth $35.4 billion.

Ukraine, dependent for more than half of its gas needs on Russia, has refused to pay the price Russia is asking, accusing Moscow of using energy supplies to punish the country for trying to break free from its influence.

Gazprom has stood firm, saying it is sticking to a 2009 contract signed by Kiev, and has threatened to cut supplies to Kiev if it fails to redeem its debt.

Moscow has twice before reduced gas supplies over price disputes, which disrupted the gas supply as well to Europe, which takes about half of the gas it imports from Russia via pipelines through Ukraine.

(Additional reporting by Harry Papachristou; editing by Jane Baird)

FILED UNDER: