UPDATE 3-Russia, Ukraine avoid gas war ahead of Obama visit

Fri Jun 26, 2009 2:14pm EDT
 
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* Gazprom says no longer concerned about June bill

* Ukraine to increase imports of gas from July

* Gazprom ready to start Azeri gas imports from 2010

* Gazprom no longer interested in Canada's Rabaska

(Adds quotes from Miller briefing, details, backround)

By Vladimir Soldatkin

MOSCOW, June 26 (Reuters) - Russia and Ukraine will avoid a repeat of the January gas row that cut supplies to Europe, at least until August, Russia's gas export monopoly said on Friday, adding that payments for future supplies were still a concern.

The head of Russia's Gazprom, the world's largest gas firm, said it was now certain Ukraine would pay its $300 million bill for June in a move to ease tensions that could have coincided with U.S. President Barack Obama's visit to Moscow next month.

"No one wants the crisis to be repeated. That (January row) was an anomaly," Alexei Miller told reporters following talks with Ukraine's officials, in a much more conciliatory comment than in previous days.

Belarus, which is the second most important route for Russian gas to Europe after Ukraine, also said it would begin paying gas arrears to Russia from July.

European customers watch eagerly talks between Russia and its transit partners, Ukraine and Belarus, as the continent gets a quarter of its gas needs from Siberian fields.

Gazprom, Ukraine's Naftogaz, global banks and the European Commission will hold talks on Monday to find a way to help Ukraine fill its gas storage to ensure smooth supplies during the winter.

Miller said he hoped a compromise would be found to help Ukraine raise the funds as the country wants to step up imports from July and onwards to take advantage of falling gas prices. Ukraine says it needs $4 billion to fill gas storage.

Ukraine, suffering a severe shock from the global crisis, also needs to pay $300 million for supplies in June. Russian officials have repeatedly said they doubt Ukraine is able to pay but Kiev has consistently come up with the money since January.

Under a 10-year deal signed in January that ended a two-week cutoff of supplies to Europe, Ukraine must pay by the seventh day of the month following the imports. Obama is due to visit Russia on July 6-8.

With Belarus the rules are less strict, but Moscow revealed this month that Minsk owes $230 million and demanded quick repayment. Miller said the debt was $244 million and said the contract foresees arbitration or supply reduction, though he said he was confident a compromise would be reached.  Continued...

 

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